Maybank Indonesia posts strong 9M earnings

Maybank Indonesia nine-month earnings jumped to Rp1.3 trillion or RM416.89mil

KUALA LUMPUR: PT Bank Maybank Indonesia Tbk (Maybank Indonesia) posted a strong set of earnings in the January-September 2016 at Rp1.3 trillion or RM416.89mil, boosted by higher net interest income and improvement in fee based income.

The bank reported on Monday the earnings had jumped 118.4% from Rp592.2bil. Profit before tax surged 123.7% to Rp1.8 trillion in September 2016 from Rp784bil a year ago.

“A healthy rise in net interest income (NII), improvement in fee based income, continuous cost management efforts and outstanding achievement in Sharia Banking contributed to the overall improved performance for the period,” it said.

Maybank Indonesia reported net interest income rose 14.8% to Rp5.5 trillion from Rp4.8 trillion in the previous corresponding period due to the bank’s discipline in loan pricing and active funding management. 

Its net interest margin (NIM) increased 4.8% in September 2015 to 5.1% in September 2016.

Fee based income rose 21.4% to Rp1.9 trillion due to the increase in fee based income was mainly driven by bancassurance fees from its new partnership with Allianz, treasury related fees, retail administration and other services.

“The bank continued to manage its costs well during the first nine months of 2016 as reflected by the marginal increase of 1.2% in its overhead costs from Rp4.1 trillion to Rp4.2 trillion. Cost-to-income ratio (CIR) improved to 55.9% in September 2016 from 64.3% in September 2015,” it said. 

Sharia Banking's net profits increased by 43.9% to Rp344 billion.  Total financing rose 39.3% to Rp11.3 trillion in September 2016 while its total deposits grew 80.3% to Rp10.1 trillion. Sharia Banking’s total assets increased by 33.5% to Rp17.8 trillion, contributing 10.9% of the Bank’s total assets.   

However, Maybank Indonesia's loans growth grew at a slower pace of 4.4% to Rp116.4 trillion from Rp111.5 trillion in September 2015. 

Underpinning the growth were the bank’s small and medium enterprises (SME) and commercial loans growth of 14.7% growth to Rp48.7 trillion.  

Retail banking loans remained stable at Rp44.8 trillion, while global banking loans fell  5.8% year-on-year as the bank continued to focus on re-profiling and re-aligning its corporate portfolio to the overall strategy. 

It explained corporate loans fell on-quarter due to the decision to exit selected loans which are not aligned to the Bank’s risk posture.

Consolidated NPL level was lower at 4.0% (gross) and 2.4% (net) as of Sept 30, 2016 compared with 4.2% (gross) and 2.7% (net) a year ago. Provision expense was up 1.8%. 

“Nonetheless, the bank remains cautious over loan quality as businesses are still being impacted by the current economic slowdown. 

It said PT Maybank Indonesia Finance (Maybank Finance) recorded a 28.7% increase in total financing (stand alone) to Rp5.4 trillion in September 2016 from Rp4.2 trillion in September 2015 despite the challenging conditions. 

Asset quality remained solid with gross NPL at only 0.42% and net NPL at 0.34%. Maybank Finance’s profit before tax reached Rp232bil in September 2016. 

“To strengthen its long term funding, Maybank Finance is finalising its issuance of senior bonds of approximately Rp1 trillion which is expected to be completed in the fourth quarter of 2016,” it added..

There was also a turnaround in PT Wahana Ottomitra Multiartha Tbk (WOM), which recorded a significant increase in its profit before tax of Rp73 billion in September 2016 compared to a loss before tax of Rp22 billion in September 2015. 

Although national motorcycles sales fell 10%, WOM recorded a 29.6% increase in its total financing portfolio (stand alone) to Rp5.7 trillion in September 2016 from Rp4.4 trillion in September 2015. 

Driving the growth was its multipurpose financing startegy, which was launched in mid 2015, and this has successfully contributed 33% of WOM’s new financing in term of units financed.

The cost management effort has improved its cost-to-income ratio to 73% from 83% in the same period last year. 

“WOM also remains focused on the implementation of prudent risk management practice to ensure sound asset quality. WOM’s gross NPL was at 3.84% and net NPL was 1.36%,” it said.

President Commissioner Maybank Indonesia and chairman of Maybank Group, Tan Sri Megat Zaharuddin Megat Mohd Nor said Maybank Indonesia has continued to grow, strongly leveraging on its re-branding to Maybank at the end of last year to demonstrate to customers our range of products and services as a regional leader. 

Maybank Indonesia president director  Taswin Zakaria said the bank continued to demonstrate improvement at the operating level in the first nine month period. 

“Our core business performance significantly improved as our rigorous risk and cost management measures as well as disciplined approach towards pricing and growth are in place.  

“We are optimistic to be able to conclude the financial year of 2016 with commendable results whilst at the same time maintain the view of continued challenging market conditions for the remaining year.”  

“We intend to step up our involvement in financing of infrastructure projects and continue to grow our SME portfolio in line with the government’s economic development agenda.  Through our extensive reach and regional capabilities, we believe that we can leverage the group’s resources to support the country’s growth agenda.”