KUALA LUMPUR: posted earnings of RM1.426bil in the first quarter ended March 31, 2016 on more provisioning for some corporate banking and business banking accounts in selected markets affected by the weakening operating environment. Maybank, which is South-east Asia’s fourth largest bank by assets said on Friday the earnings were lower than the RM1.700bil a year ago. It said net operating income rose 8.1% to RM5.39bil on-year on the back of an 11.9% increase in fund based income to RM3.82bil. Fee income was almost unchanged at RM1.57 billion. “At the same time, disciplined cost management efforts continued to bear fruit as income growth of 8.1% outpaced overheads growth of 5.3%, resulting in the group’s cost-to-income ratio improving further to 48.4% from 49.7% a year earlier,” it said. Maybank said the strong revenue growth and managed costs lifted the group’s pre-provisioning operating profit (PPOP) by 10.9% to RM2.77bil compared to a year earlier. Profit before tax slipped to RM1.93bil from RM2.24bil a year ago due to higher provisioning. “The increase in provisioning was primarily owing to the rise in number of corporate loans undergoing restructuring and rescheduling of their repayment to better match their projected cash flows arising from the subdued operating environment,” it said. Maybank pointed out under the new regulatory regime pertaining to classification and impairment provisions for loans/financing which took effect from April 1, 2015 such action taken in regards to corporate loans would require them to be classified under the “Impaired” category, notwithstanding that they are still “Performing” in nature. All key business sectors registered higher net operating income in the quarter, led by group global banking (+21.1% on-year), group community financial services (+12.4%) and group insurance and Takaful (+8.4%). Group loans grew at a reasonable pace, expanding 5.6% compared with a year earlier, led by international which rose 8.9%, and Malaysian operations which saw a 3.1% rise. This growth was, however, moderated owing to large repayments by some corporates during the quarter.
2015 - 1Q16 pre - tax profit of MYR 1 ( $ 560 m ) , down from MYR 2.24bn ( $ 570 m ) 2014 , due to higher provisioning .