Published August 28, 2008
Maybank FY08 profit falls 8% to RM2.93b
Maybank Singapore operating profit up 36%, while net profit rises 44%
By PAULINE NG IN KUALA LUMPUR

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MALAYAN Banking has posted a net profit attributable to equity holders of RM2.93 billion (S$1.23 billion) for its fiscal year to end-June 2008, nearly 8 per cent lower than the previous year.
This is due partially to a RM484 million provision for a non-refundable deposit paid for its proposed acquisition of Bank International Indonesia (BII).
Excluding the non-refundable deposit and other costs mainly related to one-off staff compensation adjustments and technology investments, the bank's earnings were flat, with pre-tax profit at RM4.38 billion and net profit at RM3.22 billion. Net income for the year was nearly 9 per cent higher at RM9.63 billion.
The bank's international operations accounted for a fifth or RM880 million of group pre-tax profit, its Singapore business contributing the bulk or 64 per cent of it.
Maybank Singapore's operating profit rose 36 per cent year on year, while its net profit rose 44 per cent.
Loans growth at Malaysia's biggest financial group expanded by 16 per cent, and its overseas loans by 27 per cent or more than twice its domestic loans of 12 per cent. Loans growth at its Singapore unit was strong at nearly 32 per cent or 23 per cent in Sing-dollar terms.
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Announcing the bank's unaudited results yesterday, Abdul Wahid Omar told a media conference that much of his 100 days in office as Maybank president and chief executive had been spent on its acquisition of BII which ran into trouble after the Malaysian central bank revoked its approval for the purchase following a change in Indonesia's policy on takeovers.
He revealed the net impact of losing the non-refundable deposit paid to acquire Sorak Financial Holdings - the controlling shareholder of BII - would be reduced to RM290 million owing to foreign exchange gains of RM193 million as the bank had earlier set aside the requisite amount in a Sing-dollar fund.
He also denied speculation the central bank had intervened to rescue the bank from the RM8.6 billion acquisition of BII, which analysts have described as 'over-priced'.
'It was not engineered or pre-meditated . . . the change in rule is what prevented us from completing. So if the issue can be overcome, we would like to proceed with that transaction,' said Mr Abdul Wahid, who reiterated the importance of having an Indonesian bank given Maybank's aspirations to be a top-five player in South-east Asia by 2015.
He said discussions were proceeding on a cordial basis and Maybank was looking at various options acceptable to all parties, and which address the concerns of Bapepam, the Indonesian financial market regulator, in particular.
Bapepam had introduced a new takeover rule which requires the acquirer to sell 20 per cent of the acquired company within two years of the takeover - a change which Bank Negara objected to as calculations revealed it was possible for Maybank to incur impairment losses of up to RM3.4 billion under those circumstances.
Sorak is 75 per cent owned by Fullerton Financial Holdings - a Temasek unit - and the rest by Korea's Kookmin Bank.
Mr Abdul Wahid described Maybank's fiscal performance as 'reasonable from our perspective', but conceded the current year was likely to be flattish as well.
He said the bank would have to work to reduce its cost-to-income ratio and to attracting talent.
In that regard, the bank is acquiring investment advisory firm BinaFikir for about RM8 million, and is appointing its managing director Rashdan Mohd Yusof and director Feisal Wan Zahir as chief operating officer and head of investment banking respectively of Aseambankers Malaysia, its merchant bank.