KUALA LUMPUR, Feb 25 (NNN-Bernama) — Malayan Banking Bhd (Maybank) expects its return on equity (ROE) for this year to be around nine per cent, an improvement over 8.1 per cent in 2020, on continued soft income environment and elevated provisioning, group president and chief executive officer Abdul Farid Alias said.
He said the bank also expected a pickup in loan growth, tracking the rebound in the country’s Gross Domestic Product (GDP) this year.
Maybank has projected that Malaysia’s economy would expand by 5.1 per cent this year.
“Roughly, our neighbouring countries, Singapore and Indonesia, which are also Maybank’s key home markets, are forecast to rebound at the same rate,” he said during the bank’s virtual press conference on the group’s results for the financial year ended Dec 31, 2020 (FY20).
Abdul Farid said that Maybank’s loan growth may see a turnaround, especially as economies emerged from lockdown, but could be tempered by continued border closures.
“Deposit growth may taper, given low-interest rates and improving economic activity,” he said.
He also said that the vaccine deployment would help to restore domestic mobility and revive consumer spending and investments.
He said the government’s accommodative monetary policy would continue, with a 25-basis point Overnight Policy Rate cut expected at the next Monetary Policy Committee meeting.
Furthermore, the loan growth is also expected to improve from a mild pick-up in credit demand amid the prolonged pandemic, with working capital recovering faster than investment.
Asked if the bank believed the worst was over for now, Abdul Farid said the group remained cautious on its prospects this year as it expected loan loss provisioning to remain elevated.
For FY20, Maybank maintained its 40-60 per cent dividend payout policy rate to reward shareholders while maintaining capital resiliency.
The board has proposed a final single-tier dividend of 38.5 sen per share, comprising an electable portion of 21 sen per share under its dividend reinvestment plan.
“Together with the interim dividend of 13.5 sen per share, the full-year dividend amounts to 52 sen per share, translating into a full-year dividend payout ratio of 91.2 per cent,” he said.
Southeast Asia’s fourth-largest bank by assets today announced that its net profit fell to US$1.60 billion (RM6.48 billion, US$1 = RM4.04) compared with RM8.20 billion in FY19 due to significantly higher net impairment losses, owing to the continued impact from the COVID-19 pandemic.
Its revenue eased to RM51.03 billion from RM52.86 billion previously.
Maybank’s shares closed at RM8.09 on Thursday, up 20 sen from RM7.89 on Wednesday, with 16.26 million shares changing hands.
— NNN-BERNAMA