Maybank’s 2021 profit rose on loan growth and better interest margins – Earnings Review
From Chester Tay
Malayan Banking Bhd. released its fourth quarter and full year 2021 results. Here’s what you need to know:
NET PROFIT: Malaysia’s biggest lender announced a 25% increase in net profit in 2021 to 8.10 billion ringgit ($1.93 billion), helped by growth in loans, interest margins higher net assets and lower provisions. Net profit beat MYR 7.86 billion according to a FactSet survey of analysts. Fourth quarter profit increased 34% year-on-year to MYR 2.06 billion.
NET INTEREST INCOME: Net interest income in 2021 increased by 8.5% to MYR 12.03 billion, below analysts’ expectations for MYR 14.39 billion.
WHAT WE WATCHED:
–NET INTEREST MARGIN: Maybank’s NIM rose to 2.3% in 2021 from 2.1% the previous year due to lower depositary costs. For 2022, MIDF Research expects Maybank to post a similar record NIM after factoring in expectations of a central bank rate hike of 25 basis points. Although higher rates would widen its NIM, Kenanga Research says potential competition for deposits could offset the gains.
–LOAN GROWTH: Total loans in the fourth quarter increased by 5.7% year-on-year, driven by strong growth in mortgages, auto finance and loans to small and medium enterprises in Malaysia. Loans in Singapore were up 8.7% year-on-year in the quarter, driven by higher volumes for housing loans and corporate bank loans. Loan growth is expected to remain resilient in 2022 thanks to economic recovery amid the lifting of pandemic-related restrictions, according to the Hong Leong Investment Bank.
Write to Chester Tay at [email protected]