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Friday, August 26, 2016

Maybank's 2Q net profit down 26.8% on higher impairment losses, declares 20 sen dividend

Maybank's 2Q net profit down 26.8% on higher impairment losses, declares 20 sen dividend
By Supriya Surendran / theedgemarkets.com | August 25, 2016 : 2:24 PM MYT

KUALA LUMPUR (Aug 25): Malayan Banking Bhd (Maybank)'s net profit for the second quarter ended June 30, 2016 (2QFY16) decreased by 26.8% to RM1.16 billion or 11.79 sen per share from RM1.58 billion or 16.76 sen per share a year ago as a result of higher impairment losses.

In its filing to the exchange this afternoon, Maybank said its allowances for impairment losses on loans, advances, financing and other debts increased by RM680.7 million to RM981.7 million in 2QFY16, marking a more than three-fold increase compared to 2QFY15.

"The increase was mainly due to higher net individual allowance made of RM268.4 million and collective allowance made of RM387.2 million," said Maybank.

The Group's net interest income and Islamic Banking income for 2QFY16 climbed 7.4% to RM3.91 billion compared to RM3.65 billion in 2QFY15. This was largely due to the growth in Maybank's gross loans, advances and financing.

Maybank's other operating income rose 20.6% to RM1.44 billion in 2QFY16 from RM1.19 billion in 2QFY15, mainly contributed by unrealised mark-to-market gain on revaluation of financial assets of RM403.7 million.

The group declared a single-tier interim dividend in of 20 sen per share, to be paid no later than three months from date of declaration.

The board of directors have also determined that the Dividend Reinvestment Plan will apply to the single-tier interim dividend with electable portion of 16 sen per share to be reinvested in new shares while the remaining 4 sen will be paid in cash.

For the first half of its financial year ended Dec 31, 2016 (1HFY16), Maybank recorded a 21.3% drop in net profit to RM2.59 billion or 26.41 sen per share compared to RM3.28 billion or 35.02 sen per share a year ago due to higher impairment losses on loans, advances, financing and other debts, which increased by more than three-fold to RM1.85 billion in 1HFY16.

The group's net interest income and Islamic Banking income for 1HFY16 climbed 8.5% to RM7.8 billion compared to RM7.2 billion in 1HFY15. This was largely due to the year-on-year growth in the group's gross loans, advances and financing.

Other operating income for 1HFY16 amounted to RM3.1 billion, a 12.8% increase from RM2.76 billion in 1HFY15.

Maybank shares were up 1 sen (0.13%) at 2.08pm to RM8 for a market capitalisation of RM79.87 billion.

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