According to Maybank Indonesia’s press release, the growth in operating profit was mainly supported by improvement in fee-based income, sustained strategic cost management and increased net interest income during the third quarter.

The bank’s profit after tax and minority interest, meanwhile, stood at Rp 1.1 trillion year-on-year (yoy) in the third quarter compared to Rp 1.5 trillion in 2018 due to an increase in loan loss provision as the bank took a conservative stance in the commercial and corporate segments impacted by weaker financial performances.

The bank saw a 23.2 percent growth to Rp 1.9 trillion yoy from Rp 1.5 trillion in 2018. The bank attributed the growth to fees related to global market, tax refund, loan administration, loan recovery and bancassurance, combined with the bank’s other services.

Net interest income rose 1.4 percent to Rp 6.1 trillion from Rp 6.0 trillion while net interest margin declined by 27 bps yoy to 5.0 percent in September 2019 from 5.2 percent in September 2018.

However, net interest margin on quarter-on-quarter basis in September 2019, was 14 bps higher compared to 4.8 percent in June 2019, due to the bank’s ongoing efforts to improve loan yield and reduce cost of funds during the third quarter of the year.

The bank also managed its liquidity surplus and high cost funds during the first semester as part of its proactive stance to ensure sufficient liquidity to mitigate any unforeseen risks during and in the aftermath of the general elections. The bank will continue maintaining discipline in loan pricing and active funding management to better mitigate pressures on margin.

The bank continued to preserve a strong liquidity position with customer deposits increasing 4.3 percent to Rp 115.6 trillion in September 2019 from Rp 110.8 trillion in September 2018.  The bank’s loan-to-deposit Ratio (LDR – Bank only) was at a healthy level of 96.3 percent, while its liquidity coverage ratio (LCR Bank) stood at 169.7 percent as of September 2019, way above the mandatory minimum of 100 percent. 

Global banking booked strong loans growth of 13.7 percent to Rp 35.4 trillion from Rp 31.1 trillion supported mainly by loans from state-owned enterprises (SOEs) and top tier corporate for infrastructure and investment.

However, community financial services (CFS) non-retail loans, which comprise small & medium enterprises (SME), was 7.0 percent lower to Rp51.9 trillion, while CFS Retail loans declined 4 percent to Rp42.5 trillion as at September 2019. As a result, total loans declined marginally by 1.1 percent to Rp 129.8 trillion as of Sept. 30 from Rp 131.2 trillion as of the same period in 2018.

Overhead costs remained under control with 8.4 percent growth reaching Rp 4.9 trillion in September 2019 from Rp 4.5 trillion in September 2018 as a result of sound cost management initiatives across business lines and support units.

The bank increased its loan loss provision by 59.4 percent to Rp1.6 trillion as of September 2019. This provisioning was mainly due to a few accounts in the commercial and corporate segment impacted by weaker financial performances. The bank continues to take a proactive stance to assist customers facing challenges and maintain risk posture to safeguard asset quality. This resulted in improved asset quality as reflected by the decline in non performing loans (NPL) level from 2.7 percent (gross) and 1.5 percent (net) in September 2018 to 2.6 percent (gross) and 1.5 percent (net) in September 2019.

The Bank’s capital position remained strong with its Capital Adequacy Ratio (CAR) at 20.1 percent in September 2019 compared to 18.8 percent in the previous year and total capital of Rp26.8 trillion in September 2019 compared to Rp25.3 trillion in September 2018.

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