Maybank ... Jun 09

MAYBANK 3QE MAR 2009 NET PROFIT DOWN BY 32%

MAYBANK reported 3QE Mar 31, 2009 Net Profit lower by 32% from the previous quarter and Gross NPLs in its international units were 22% higher.

9ME MAR 2009 RESULTS
For 9ME Jun 2009, MAYBANK recorded a core Net Profit of RM1.7 bil ? a 24% decline from the previous corresponding period.

The lacklustre performance was largely due to a 22% fall in Non-Interest Income and a 32% jump in Loan-Loss Provisioning in its international units.

MAYBANK's results are the worst by a Malaysian bank since the start of the economic crisis nine months ago and could be a sign of the times, heralding bleaker conditions for most companies and financial institutions.

MAYBANK's PROBLEMS & PRICEY ACQUISITIONS
This time in 2008, the problem wasn't falling revenue but grappling with the increasingly higher costs of doing business, following increasing material and fuel prices. Now, it is the collapse in global demand which has impacted different sectors differently.

MAYBANK has more complicated problems said a BUSINESS TIMES SINGAPORE report of May 19, 2009 which said that the Bank had lost much of its lustre following dubious investments in Pakistan and its pricey acquisition of BANK INTERNASIONAL INDONESIA after it acquired over 65% of the Indonesian bank at close to 4 times its Book Value.

MASSIVE RIGHTS ISSUE
A massive Rights Issue ? a 9-for-20 issue at RM2.74 apiece ? to help part-fund the Indonesian purchase further annoyed investors as it would mean earnings dilution going forward. AMSEARCH RESEARCH said that " .... We see stock performance capped by weaker performance of its overseas operations while pricey acquisitions would push ROEs (returns on equity) lower for the next few years ....".

DOMESTIC OPERATIONS
The Bank's domestic operations, which account for 67% of Gross Loans, remained in good shape. Gross NPLs for the Bank's domestic operations actually fell 3.1 per cent to RM5.7 bil q-o-q.

INTERNATIONAL OPERATIONS FARED DISMALLY
The Bank's international units ? in Pakistan, Vietnam and Indonesia ? fared dismally: NPLs surged 22% to RM1.14 bil. Overall Net NPLs actually improved 1.8% in Mar from 1.7 per cent last Dec 2008.

MANAGEMENT REMAINS UPBEAT
MAYBANK's management seemed upbeat, suggesting that all impairment reviews on its international units would be completed by Jun 2009. AMSEARCH suggested otherwise, predicting further impairment losses at MAYBANK's Pakistani unit as ' .... its performance has been below expectations ....".

Related post:-
Maybank....dated May 2008