Malaysian banks report improved overall performance and increase in net profit and total income for the second quarter and first half of 2017 while issuance and sales of structured products was up too during the period, according to SRP data.
Maybank Group reported a 29.9% increase in net profit, from MYR2.6bn (US$608m) for the first half of 2016 (1H16) to MYR3.4bn for 1H17. Net profit for the second quarter of 2017 (2Q17) was MYR1.6bn, indicating a decrease of 2.6% from MYR1.7bn for 1Q17.
Maybank issued 42 structured products worth MYR990m in the first half of 2017 (1H16: 15 products/MYR700m), according to SRP data. The products were targeted at investors in Malaysia and were linked to equities (33), interest rates (six) and FX rates (three).
The group's net operating income, including net fund based income and net fee based income, rose by 5.8%, from MYR10.7bn for 1H16 to MYR11.4bn for 1H17. Compared to the previous quarter, net operating income increased by 4.6% in 2Q17 to MYR5.8bn. Net fund based income was MYR8.2bn for 1H17, up 10.9% compared to 1H16, and MYR4.14bn for 2Q17, up 0.6% compared to 1Q17. Year-on-year, net fee based income decreased by 5.7%, mainly due to unrealized losses on derivatives.
Pre-provisioning operating profit rose by 5% year-on-year and 9.6% quarter-on-quarter supported by the improved net income growth.
The group reported total assets of MYR752.1bn for 1H17, 68% of which was due to customer funding and 9% due to equity. Return on equity was 9.7% for 1H17, indicating an increase of 1.4% compared to the same period last year. On a quarterly basis, return on equity was down 0.4%.
Total income from the group's investment business was MYR674.7m. The group's investment activities in Malaysia and Singapore accounted for 36% and 26%, respectively, of total investment income.
RHB Bank's net profit remained almost unchanged at MYR501m for 2Q17 compared to the previous quarter, but increased by 43% compared to 2Q16. Net profit for 1H17 was MYR1bn, indicating a rise of 9% YoY.
RHB Bank launched 96 structured products with estimated sales of MYR1.5bn in Malaysia in half-year 2017, up from 54 products during the same period last year. Sixty-nine of this years products were linked to equities, with the remaining products linked to FX rates (24) and the interest rate (three).
The group's total income was up 2%, from MYR1.55bn for 1Q17 to MYR1.57bn for 2Q17, with net interest income up by 4% and net fund based income up by 8%. Income from wealth management activities decreased by 3% on a quarterly basis but increased by 36% on a yearly basis. Treasury income included MYR30m gain & mark to market on securities/derivatives in the second quarter of 2017, down from MYR59m q-o-q and MYR42m in the same period last year (1H17: MYR89m).
CIMB Group's operating income expanded 13.9% from MYR7.6bn for 1H16 to MYR8.7bn to 1H17, translating to a 21.4% year-on-year improvement in pre-provisioning operating profit and a 35.3% YoY growth in net profit after tax to MYR2.28 billion. On a quarterly basis, operating income and net profit decreased by 0.8% and 6.5%, respectively.
CIMB issued 1,478 structured products - including 1,330 reverse convertibles - between January 1 and June 30, 2017, according to SRP data. Of these, 1,426 were targeted at investors in Thailand while the remaining 52 products were aimed at investors in Malaysia. In half-year 2016 the bank issued just 251 products including six reverse convertibles.
The group reported a 15.9% increase in non-interest income from MYR2.1bn for 1H16 to MYR2.5bn for 1H17. Compared to the previous quarter, non-interest income decreased by 8.5%, from MYR1.2bn to MYR1.3bn. Net interest income increased 13.1% on the year and 2.4% compared to the previous quarter.
The annualised 1H17 net return on average equity was 9.9%, up from 8.1% for 1H16. As compared to 1Q17, net return on average equity dropped down from 10.3% to 9.4%.
The profit before tax of the group's asset management and investment business increased by 44.4% QoQ and decreased by 35.8% YoY.
'We are pleased with our first half year 2017 results, particularly the 35.3% YoY net profit increase, a lower Cost-to-Income ratio of 52.5% and strengthened CET1 ratio of 11.9%,' said Tengku Dato' Sri Zafrul Aziz (pictured), group chief executive at CIMB Group, in a statement. 'Our performance was driven by loans growth across segments, improvements in net interest margin and better-performing capital markets. Our results in recent quarters is testament to the Group's continuous focus on building sustainable growth, maintaining margins, managing cost and optimising capital.'
Hong Leong Bank reported that net profit after tax expended by 12.5% y-o-y to MYR2.1bn for the financial year of 2017 (FY17). Total income for FY17 increased by 8.9% on the year to a record MYR4.5bn, the highest since the bank's merger with EON Bank.
Nine structured products (MYR450m) were issued by Hong Leong in Malaysia during 1H17, down from 18 products (MYR900m) during the same period last year.
Net interest income continued improving and in the fourth quarter of FY17 (4QFY17) increased by 11.6% to MYR864m. For the whole FY17, net interest income reached MYR3.4bn, up by 9.1% compared to FY16. Non-interest income for FY17 rose 8.4% YoY to MYR1.2bn as a result of stronger wealth management fees, dividend income from investments and higher gains from treasury operations, the bank announced. Operating profit also expanded to from MYR0.09bn for FY16 to MYR2.5bn for FY17, indication an increase of 21.6%.
AmBank Group reported a 3.6% year-on-year increase in profit before provisions to MYR429m for 2Q17. Profit before tax went down by 6% to MYR449m, while profit after tax went up by 1% to MYR364m.
Ambank issued 28 structured products worth MYR84m during the first six months of 2017 (1H16: 0 products), according to SRP data. The products, which were wrapped as warrants, were linked to single stocks.
Net income rose by 3%, from MYR951m for 2Q16 to MYR982m for 2Q17. Net interest income went up by 8% while non-interest income decreased by 4%. Non-interest income decreased from MYR407.3m for 1Q17 to MYR368m for 2Q17. Income from the group's wealth management business was 47% of total income, indicating an increase of 14% compared to the same period last year. Income from retail banking constituted 18% of total income.
Click the link to view the full reports here: Maybank Group, RHB Bank, CIMB Group, AmBank, Hong Leong Bank.
Related Stories:
Stanchart launches loan facility to leverage investments in Malaysia
Maybank moves to expand offering
Leonteq and Maybank launch structured investment products partnership