August 28, 2014 / 9:31 AM / 3 years ago

UPDATE 1-Maybank posts lowest quarterly profit in a year as deals scarcer

* Q2 net profit edges up just 0.5 pct from a year ago

* Loan growth remains robust

* Challenging to achieve return on equity target of 15 pct

* Maybank sees no urgent need for M&A but will scout (Recasts and adds CEO comment)

By Yantoultra Ngui

KUALA LUMPUR, Aug 28 (Reuters) - Malayan Banking Bhd (Maybank), Malaysia’s largest bank, booked its lowest quarterly profit in a year, hampered by a dearth of IPO and other deals as well as wider losses for its insurance division.

Net profit for April-June was flat, although loan growth, which has pushed Maybank to record profits for the past two years, continued to be robust and is set to help the bank put in a better performance in the second half.

Like other Southeast Asian rivals, Maybank has benefited from booming property markets and rapidly expanding economies in the region, and has seen strong growth for its Islamic banking finance division in particular.

But developments such as a coup in Thailand and elections in Indonesia have put a lid on corporate advisory fee-based income this year.

Net profit for the three months to end-June edged up just 0.5 percent from the same period a year ago to 1.58 billion ringgit ($500 million) on a 2 percent gain in revenue. Most analysts covering Maybank do not release quarterly forecasts.

Maybank also said it would likely have return on equity of 14 percent, less than its target of 15 percent which it met last year.

On a more positive note for investors, it announced a quarterly dividend of 24 sen, higher than the 22.5 sen for the year-ago period.

Maybank rival CIMB Group Holdings Bhd announced plans in July to merge with two smaller lenders to create a mega-Islamic bank that would see it gain No. 1 ranking in the sector.

The move has prompted much speculation that Maybank and others in the region will be keen to bulk up, but Maybank CEO Abdul Farid Alias stressed the bank was comfortable where it was and saw no need to make any urgent acquisitions.

“We don’t have a need to do it,” Abdul Farid said. “But we are not closing the door for any M&A... we do check around what’s going on, we are not passive.”

He noted that Maybank’s Islamic banking division was the world’s third biggest such operation by assets.

Maybank this month said it will raise up to 10 billion ringgit to fund working capital, general corporate purposes and to refinance its debt. The bank will raise funds by issuing capital securities, a hybrid instrument with both bond and equity components..

CIMB will announce its second-quarter results on Friday. (1 US dollar = 3.1460 Malaysian ringgit) (Reporting by Al-Zaquan Amer Hamzah, Anuradha Raghu in Kuala Lumpur, Saeed Azhar in Singapore and Shilpa Murthy in Bangalore. Editing by Edwina Gibbs)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below