Maybank second quarter profit slides, says closely monitoring oil sector loans
By Liz Lee
KUALA LUMPUR (Reuters) - Malaysia's biggest lender Malayan Banking Bhd (Maybank) (MBBM.KL: Quote) said on Thursday it is keeping a close watch on loans made to the oil and gas sector, after posting a 27 percent drop in quarterly net profit as allowances for loan impairment losses tripled.
Slowing loan growth in Malaysia and higher provisioning for loan impairments across the region due to rising risks in industries such as oil and gas have hurt Southeast Asia's fourth largest bank by assets.
"We will... remain vigilant and maintain proactive management of asset quality while building our capital and liquidity positions," Group CEO Abdul Farid Alias said in a statement.
Net profit slid to 1.16 billion ringgit ($288.70 million) for the April-June quarter from 1.58 billion ringgit a year ago. Net interest income rose 7.5 percent to 2.88 billion ringgit.
The bank saw allowances for impairment losses jump to 982 million ringgit in the quarter from 301 million ringgit in the same period last year.
Group CFO Amirul Feisal Wan Zahir said Maybank was also monitoring the oil and gas sector. About 3.75 percent of the group's total loans were in that sector, he said.
"We are monitoring the sector closely in Malaysia and Singapore," Amirul told reporters.
Analysts have said Maybank has exposure to Swiber Holdings (SWBR.SI: Quote), which last month became the biggest Singapore business to fall victim to the oil price slump. Amirul declined to comment on the bank's exposure to Swiber. Continued...