KUALA LUMPUR: Malayan Banking Bhd
’s (Maybank) 98.52%-owned PT Bank Maybank Indonesia Tbk (Maybank Indonesia) saw its pretax profit jump 33.3% to 750 billion rupiah (RM228.15mil) in the first quarter ended March 31 from 562 billion rupiah (RM171mil) last year.
The bank said this was derived from improved earnings on its assets composition due to an increase in loans as demands for corporate and retail loans increased in line with the improvement in the economy in Indonesia.
Maybank Indonesia also booked higher fee income primarily from the global markets (GM) transactions as markets regained its momentum, and subsidiaries’ strong performance as well as improved asset quality.
Its profit after tax and minority interest (Patami) surged 45.7% to 566 billion rupiah from 388 billion rupiah the year before, due to better earnings from the bank’s improved assets composition which led to an increase in net interest income (NII) by 6.7% year-on-year (YoY) and net interest margin (NIM) expanded by 35 basis points bps to 5.1% YoY.
The bank booked a significant rise in fee-based income by 20.7% to 574 billion rupiah from 475 billion rupiah last year deriving from higher GM fees, which grew 98.7% to 101 billion rupiah from 51 billion rupiah as the market regained its momentum.
Asset recovery fees (bank only) also increased by more than seven times to 142 billion rupiah as a result of the Bank’s intensive remedial efforts over the past year.
As the market strengthened in the first quarter of 2023, the bank was able to book a higher fee-based income of 30.6% quarter-on-quarter.
In the first quarter of 2023, Maybank Indonesia’s outstanding loans grew 7.7% to 107.22 trillion rupiah from 99.52 trillion rupiah as community financial services (CFS) retail loans grew 14.6% to 40.10 trillion rupiah from 34.98 trillion rupiah, and global banking loans grew 11.4% to 39.29 trillion rupiah from 35.26 trillion rupiah last year.
The bank's CFS Retail loans grew across all segments, supported by the subsidiaries' auto loans, which grew 26.1% to 20.54 trillion rupiah from 16.29 trillion rupiah, followed by credit card business and personal loans, which grew 20.6%, YoY and mortgage grew 2.2% YoY.
Meanwhile, CFS non-retail loans declined by 5.0% to 27.83 trillion rupiah from 29.28 trillion rupiah as the business banking segment declined by 14.6%, while SME+ segment remained largely stable.
Its retail small medium enterprises (RSME) segment grew 2.3% to 12.74 trillion rupiah from 12.46 trillion rupiah.
The bank’s total deposits decreased by 2.2% to 103.61 trillion rupiah from 105.98 trillion rupiah while its current accounts grew 19.6% to 32.54 trillion rupiah from 27.22 trillion rupiah and the CASA ratio improved to 51.9% in March 2023 from 47.1% in March 2022.
However, savings account dropped by 6.7% and time deposits reduced by 11.0% as the bank continued to exit high-cost funding.
Asset quality continued to improve in the first quarter of 2023, which resulted in lower provisions by 16.9%. Non-performing loan (NPL) balances decreased by 8.8% YoY and loan at risk ratio (LAR Bank only) improved to 12.1% in March 2023 from 17.5% in March 2022.
The bank's consolidated NPL ratio improved to 3.4% (gross) and 2.3% (net) in March 2023 from 3.9% (gross) and 2.8% (net) in March 2022.
Its loan to deposit (LDR) ratio (Bank only) was at a healthy level of 88.2% in March 2023 from 82.0% in March 2022, and liquidity coverage (LCR) ratio (Bank only) was at 174.2% in March 2023, exceeding regulator's minimum level of 100%.
The bank's capital adequacy ratio (CAR) remained strong at 29.1% in March 2023, with total capital of 28.85 trillion rupiah at the end of March 2023.
President director Taswin Zakaria said Maybank Indonesia started 2023 on a positive note, and its first quarter of the year delivered strong growth performance across our key business segments.”
“Amidst global economic challenges, we saw consumer purchasing power and business activities slowly returning back to normal in Indonesia as indicated by our strong growth in the bank’s retail, small-medium enterprise and wholesale loan segments.
“From a liquidity perspective, customer deposits continued to rebalance, allowing Maybank Indonesia to manage its funding more efficiently and further strengthen our fundamentals.
“Moving forward, we will continue with our M25+ strategies covering the Bank’s transformation efforts to accelerate digital SME's capabilities and our Islamic wealth proposition.”
Meanwhile, president commissioner Datuk Khairussaleh Ramli said: “For Maybank Indonesia, acceleration of digitalisation, enhancement in customer-centricity, focus on regionalisation, Islamic business growth and sustainability is expected to boost the performance of Maybank Indonesia.”
“Maybank Indonesia features prominently in the M25+ transformation programme. Apart from Strategic Programme (SP) 7, which will ‘Uplift Indonesia’, most of the SPs will also directly provide business and operational improvements, as well as capability enhancements.”
