Malaysia’s Maybank posts highest-ever first-quarter profit

Malaysian banks with presence in the neighboring Southeast Asia countries, such as Maybank, expect stronger demand for corporate and consumer loans as economies improve. (Reuters)
Updated 28 May 2018
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Malaysia’s Maybank posts highest-ever first-quarter profit

KUALA LUMPUR: Malayan Banking (Maybank), Malaysia’s largest lender, posted its highest ever first-quarter profit, helped by a drop in expenses and continued decline in impairment losses.
Maybank’s net profit for the quarter was 1.9 billion ringgits ($477.39 million), up 10 percent from 1.7 billion ringgits a year ago. It beat an average estimate of 1.85 billion ringgits from two analysts surveyed by Thomson Reuters.
Revenue was 2 percent higher at 11.5 billion ringgits.
The results were supported by a better cost-to-income ratio of 47.6 percent, versus 50.1 percent a year ago, as fee-based and fund-based income growth outpaced rise in overhead expenses, the bank said in a statement on Monday.
Net impairment losses for the quarter ended March fell 7.7 percent, while gross impaired loans ratio improved to 2.37 percent from 2.40 percent, it added.
Maybank’s Malaysian operations recorded a strong 6.7 percent increase in loans, while its Singapore and Indonesia operations saw increases of 5.5 percent and 2.9 percent, respectively.
On the group level, loans expanded 1.5 percent year-on-year.
Maybank Chairwoman Mohaiyani Shamsudin said the bank was buoyed by the positive outlook in the region and Malaysia, despite some uncertainties in the operating environment.
“In particular, we await policies which are expected to be outlined by the new government in Malaysia which we hope will further drive private sector investments and enhance consumer confidence,” she said.
The country’s lenders are seeing increased domestic loan demand from sectors including manufacturing, finance and infrastructure, analysts said.
Malaysian banks with presence in the neighboring Southeast Asia countries expect stronger demand for corporate and consumer loans as economies improve, which is likely to support credit growth in 2018.
But slower economic growth is a concern and uncertainty over economic policy has increased after 92-year-old Mahathir Mohamad led an opposition alliance to a surprise election win this month. Malaysia’s first-quarter GDP grew 5.4 percent from a year earlier, its second straight quarter of slower economic growth.
Maybank’s net interest margin (NIM) — the difference between interest paid and earned and a key gauge of bank profitability — shrank slightly to 2.39 percent in the first quarter from 2.43 percent a year ago.


OPEC oil ministers gather to discuss production increase

Updated 19 June 2018
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OPEC oil ministers gather to discuss production increase

  • Analysts expect the group to discuss an increase in production of about 1 million barrels a day
  • The officials were arriving in Vienna ahead of the official meeting Friday

VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.