Maybank Quarterly Profit Rises on Lower Provisions, Better Cost Management — Update

By Ying Xian Wong

Malayan Banking's second-quarter net profit climbed 2.4%, helped by lower impairment and better cost management, though growth was slightly slower than market expectations.

Malaysia's largest lender by market capitalization said Thursday that net profit increased to 2.69 billion ringgit, equivalent to $668.1 million, from 2.63 billion ringgit a year earlier, thanks to disciplined cost management and lower impairment provisions. Analysts had estimated 2.72 billion ringgit, according to a Visible Alpha-compiled consensus.

Quarterly net interest income declined 2.4% to 3.10 billion ringgit, while net fund-based income increased 1.9% to 5.03 billion ringgit.

Net interest margin expanded 10 basis points to 2.10% in the quarter, while net impairment provisions roughly halved to 230 million ringgit, the bank said.

Operating expenses fell 2.5% to 3.69 billion ringgit despite higher establishment costs tied to tech initiatives, bringing the cost-to-income ratio down to 49.1% from 49.3%.

For the six months ended June, net profit edged 0.8% lower to 5.17 billion ringgit. The board declared an interim dividend of 31 sen a share, compared with 30 sen a year ago.

Maybank said its underlying business remained strong amid a volatile operating environment. Against a backdrop of resilient Southeast Asian growth, the Malaysian lender expects the country's economic outlook to remain constructive, with 2026 GDP growth projected at 5.3%, supported by tech and trade tailwinds. It also sees growth benefiting from favorable terms of trade, underpinned by stronger energy exports and higher commodity prices amid developments in the Middle East.

Noting evolving global risks, Maybank said it is cautiously optimistic about balancing business expansion with prudent management of asset quality, capital and liquidity.

The results come as the Middle East conflict has disrupted supply and driven oil prices higher, adding to business uncertainty and rattling investors. Shares of Maybank have lost nearly 15% of their value since hitting a peak in late February. The lender's deal to take full control of its insurance unit for the equivalent of $1.2 billion has also dented sentiment on the stock, owing to concerns about the acquisition hurting capital buffers.

Analysts have flagged elevated valuations and limited drivers for the banking sector that risk capping gains. The benchmark KLCI's planned expansion to 50 constituents to diversify the index away from its traditional concentration in financial stocks could also be a temporary overhang on bank shares, they said.

In the absence of immediate catalysts, Malaysia's banking sector is expected to remain range-bound in the near term, Hong Leong Investment Bank analyst Raymond Ng said. Current valuations already reflect optimism over capital management, with the sector trading at 1.15 times forward book value, one standard deviation above its five-year average, he wrote in a recent note.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

August 27, 2026 03:07 ET (07:07 GMT)