Maybank Indonesia released the information on April 29. In its official release, the bank attributed its profit growth to a 7.7 percent increase of its net interest income to Rp 2 trillion from Rp 1.9 trillion during the same period last year. The bank attributed its net interest income increase to its ability to achieve 10.9 percent loan growth for the first three months of 2019.

The bank’s lending expanded by 10.9 percent to Rp 135.8 trillion in the first quarter of this year from Rp 122.5 trillion in the same period last year. The growth was mainly spurred by loans to state-owned enterprises and top-tier corporate clients.

Maybank Indonesia’s community financial services (CFS) non-retail loans comprising small and medium enterprises (SMEs) and business banking loans grew by 8.5 percent to Rp 56.5 trillion in the first quarter of this year from Rp 52.1 trillion in the same period last year. The bank’s CFS retail loans, meanwhile, increased by 1.6 percent to Rp 43.5 trillion in the first quarter of this year.

Furthermore, the bank also factored in its continuous implementation of disciplined pricing coupled with improved operational efficiencies as primary measures to boost its profit growth in the first quarter of this year, as these factors enabled the bank to buffer pressures on interest margin, keeping the bank’s net interest margin constant at 4.8 percent.

The bank also took a proactive stance to make sure that its liquidity rate was more than optimal to mitigate unforeseen risks during a period of possible uncertainty in the lead up to the recent election.

The bank also maintained a strong liquidity position with customer deposits increasing by 6.2 percent to Rp 128.4 trillion in March 2019 while its loan-to-deposit ratio remained at a healthy level of 90.1 percent. The bank’s liquidity coverage ratio stood at 145.8 percent as of March 2019, far exceeding the mandatory minimum ratio of 100 percent.

The bank’s asset quality, meanwhile, continued to improve as reflected by its lower non-performing loan (NPL) levels of 2.9 percent (gross) and 1.7 percent (net) as of March 31, compared to 3.0 percent gross and 1.8 percent net NPL levels seen in 2018. The bank continues to focus on improving its asset quality and will maintain a conservative stance in its risk posture.

Staying true to this conservative approach over loan quality, the bank also increased its loan loss provision by 52.2 percent to Rp 400.5 billion as of March 2019, to adjust to businesses that continue to be impacted by the current economic situation.

The bank’s capital position remained strong with its capital adequacy ratio of 18.7 percent and a total capital of Rp 25.9 trillion in March 2019.

“Despite the challenging start to 2019, we have resumed our growth momentum, as reflected in the progression of our top line services. In regaining our growth, we continue to uphold our prudent portfolio guideline and robust risk management policy to ensure stable asset quality,” Maybank Indonesia President Director Taswin Zakaria said, commenting on the bank’s performance.

“We will continue to seize opportunities for further growth and remain optimistic for the upcoming quarters as we have started to focus more on advancing our digital banking platform this year to strengthen customer origination,” he continued.

The bank’s profit after tax and minority interest, however, declined to Rp 414.9 billion in the first quarter of 2019 from Rp 463.1 billion in the same period in 2018. The decline occurred due to the increase in the bank’s loan loss provision, corresponding with its conservative stance in setting aside provision for business loans which were impacted by the ever-challenging economy.

Nevertheless, Maybank Indonesia President Commissioner as well as Maybank Group President and Chief Executive Officer Datuk Abdul Farid Alias said that the bank’s solid foundation had succeeded in maintaining its business results.

“The bank has built a strong capital and liquidity base while firmly embedding sustainable business development strategies covering retail transformation, digital banking enhancement, corporate culture transformation as well as asset quality selection to ensure continued value creation for all our stakeholders,” Abdul said.

“Although the external economic environment remains challenging, we are confident we can manage the risks and ensure steady growth of our business in the coming quarters,” he added.

Sharia banking

The bank’s sharia banking division, meanwhile, also recorded financing growth of 22.1 percent to Rp 24.6 trillion in the first quarter of this year from Rp 20.2 trillion in the previous year.

The growth of sharia financing was accompanied by better asset quality, with lower non performing financing levels, which stood at 2.9 percent (gross) and 2.1 percent (net) as of March 31, compared to its NPL levels in the same period in 2018, which stood at 3.2 percent (gross) and 2.1 percent (net).

The bank’s sharia banking business also succeeded in increasing its total deposits which jumped to 52.2 percent to Rp 26.6 trillion in March 2019 from Rp 17.5 trillion in 2018. The bank attributed the increase to its focused efforts in growing a steady customer base for its sharia business division and its launch of innovative products supporting the division, such as the haj savings program called My Arafah.

The bank’s sharia assets, meanwhile, increased by 21.7 percent to Rp 32.9 trillion, constituting 17.5 percent of the bank’s total consolidated assets.

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