Malaysia's Maybank profits fall 22 percent in first quarter

Malaysia's top lender Maybank said Tuesday its first quarter profits fell 22 percent from the same period last year due to higher loan loss provisions and losses in an associated company.

Maybank, officially known as Malayan Banking, reported its net profit for the first three months to September 2008 fell to 572.2 million ringgit (160 million dollars) from 735.4 million ringgit a year ago.

Maybank chairman Mohamed Basir Ahmad said in a statement that the group was fundamentally sound despite the poorer results.

"Despite the lower profit recorded for the quarter, the group remains strong in terms of its total asset quality which improved steadily, clearly reflecting its strong fundamentals and resilience in all economic cycles," he said.

The net non-performing loan ratio strengthened to 1.84 percent from 1.92 percent in June 2008 while loan loss coverage improved to 100.2 percent in September.

Net interest income was 3.6 percent lower at 1.27 billion ringgit while non-interest income fell to 478.7 million ringgit from 610.2 million ringgit a year earlier.

Loan loss provision was 192.2 million ringgit compared to 108.1 million ringgit a year ago mainly due to the lower specific allowance written back.

Maybank said its pre-tax profit for the period was impacted by impairment losses in an associated company which amounted to 242 million ringgit.

The bank said it expected net profit for its financial year ending June 2009 to be lower given the deteriorating global financial and economic situation.

It said the operating environment for the domestic banking sector would be more challenging, against this backdrop, with slower loans growth and increasing risk of greater non-performing loans.

"We are adopting a conservative outlook for the financial year ahead, focusing on strengthening our core areas of business to drive growth and building on our regional footprint to set the foundation for future growth," said Maybank president and CEO Abdul Wahid Omar in the statement.

Sumber: MSN News