Malayan Banking (MAYBANK) Q1 2025 earnings summary

Executive summary

• Net profit for 1Q FY2025 increased 4.0% year-over-year to RM2.59 billion, driven by higher net operating income, improved asset quality, and stable net interest margins at 2.04%.

• Return on equity improved to 11.3% YTD annualized, with stable non-interest income and higher wealth management fees.

• Profit before tax rose 4.4% year-over-year to RM3.59 billion, with disciplined cost management despite global headwinds.

• Overhead expenses grew 2.3% year-over-year to RM3.74 billion, mainly due to higher personnel, marketing, and establishment costs.

• Sustainability commitments advanced, with RM10.29 billion in sustainable finance for 1Q FY25 and a 53.6% reduction in scope 1 & 2 carbon emissions.

Financial highlights

• Net fund-based income rose 2.3% year-over-year to RM4.95 billion, with group loans growth of 3.2%.

• Non-interest income was stable at RM2.76 billion, with wealth management fees up 28.0% year-over-year.

• Pre-provisioning operating profit increased 1.3% year-over-year to RM3.97 billion.

• Net credit charge-off rate improved to 23 bps, with loan provisions reduced by 17.9% year-over-year.

• Group deposits grew 5.1% year-over-year, with CASA ratio at 36.6%.

Outlook and guidance

• Loans growth guidance for 2025 is 5%-6%, with cost-to-income ratio targeted below 49%.

• Return on equity expected to be at least 11.3%, and net credit charge-off rate to remain at or below 30 bps.

• Management expects moderate GDP growth in key markets: Malaysia at 4.1%, Singapore at 2.1%, Indonesia at 4.7%.

• Strategic focus on digital modernization, customer penetration, and robust liquidity and capital levels amid global trade uncertainties.

• Cautiously optimistic outlook, supported by domestic demand and intra-ASEAN trade, but softer loans growth anticipated amid global trade headwinds.