Malayan Banking (MAYBANK) Q2 2024 earnings summary

Executive summary

• Net profit for 1H FY2024 rose 9.0% year-over-year to RM5.02 billion, driven by strong non-interest income, robust loan growth, and improved insurance/takaful results.

• Net operating income increased 9.4% to RM14.92 billion, with significant contributions from core fees, insurance, and treasury income.

• Interim dividend of 29 sen per share declared, with a payout ratio of 69.7% (RM3.50 billion) and dividend yield of 5.6%.

• Strategic initiatives under M25+ delivered positive growth in digital innovation, customer centricity, and sustainability.

• Loans grew 10.4% YoY across all home markets, supported by 7.9% deposit growth and a 9.8% increase in CASA balances.

Financial highlights

• Total operating income for 1H FY2024 was RM16.33 billion, with net operating income at RM14.92 billion, and profit before tax up to RM6.89 billion.

• Net fund based income increased to RM9.77 billion, with NIM at 2.01% (down 11-15 bps YoY).

• Non-interest income surged 28.4% YoY to RM5.15 billion, led by 16.5% growth in core fees and improved insurance performance.

• Operating costs rose 12.0% YoY to RM7.25 billion, mainly from higher personnel, IT, and marketing expenses; cost-to-income ratio at 48.6%.

• Pre-provisioning operating profit up 7.1% YoY to RM7.67 billion.

Outlook and guidance

• FY2024 focus on revenue uplift, asset quality preservation, and driving M25+ momentum.

• Full-year NIM compression guidance revised to about 10 bps; cost-to-income ratio expected below 49%.

• Net credit charge off rate guidance at ≤30 bps; ROE target at 11%.

• Dividend payout policy updated to minimum 40% of reported net profit.

• Management remains optimistic for 2H 2024, focusing on digital innovation and prudent risk management.