The Maybank Group today announced that its pre-tax profit for the quarter ended 30 September 2005 rose 19.4% to RM946.9 million from RM793.2 million in the previous corresponding period ended 30 September 2004.

Net profit for the quarter rose 21.2% to RM672.9 million from RM555.0 million in the previous corresponding quarter.

The performance translated into a net return on equity of 16%. Earnings per share rose to 18.06 sen from 15.42 sen previously while net tangible assets per share improved to RM4.62 sen at September 2005 from RM4.41 sen in June 2005.

Interim dividend of 50 sen

The President and CEO of Maybank, Datuk Amirsham A Aziz announced that the board has declared an interim dividend of 50 sen less 28% income tax, payable on 16 January 2006. This dividend is in line with Maybank's continuing efforts to manage its capital efficiently as well as reward its shareholders. It aims to further reduce the cost of the Bank's capital substantially through a rebalancing of its capital structure and at the same time give flexibility to support business expansion.

Datuk Amirsham explained that as at 30 September 2005, the tier-1 and total capital adequacy ratios of the Bank on a proforma basis, after taking into consideration the final and special dividends declared for the year ended 30 June 2005, as well as the proposed acquisition of MNI Holdings, was 9.61% and 11.72% respectively.

However, by the end of the year, the ratios are expected to rise to 9.76% and 12.64% respectively following the increase in equity as a result of recent exercise of shares under the ESOS scheme as well as the just completed issue of RM1 billion in Islamic bonds.

With this current interim dividend payout, the proforma tier-1 and total capital adequacy ratios will be at a more efficient level of 8.74% and 11.61% respectively, which are still well above the regulatory requirement of 4% and 8%.

Factors contributing to performance

On the performance of the Group, Datuk Amirsham said that it was achieved on the back of a 23.9% increase in non-interest income as well as improved net interest income and income from Islamic banking operations which together rose by 6.8%.

He added that arising from this, the ratio of non-interest income to gross income for the quarter rose to 33.8% from 30.9% in the previous corresponding period, which were in line with the Group's strategy and continuous efforts to diversify its income streams. Net income also continued to grow at a faster pace than overheads, resulting in the cost-to-income ratio improving further to 37.8% for the quarter just ended compared to 38.8% for the previous corresponding period.

Income from Islamic Banking operations grew by 25.3% to RM200.5 million from RM160.0 million previously, arising from an overall increase in financing which rose by 17% compared to the previous corresponding period. Strong growth was particularly recorded in Islamic hire purchase (+ 31.3%), Islamic trade finance (+18.3%) and BBA term financing (+13.3%). The Maybank Group continues to be a leader in Islamic banking in Malaysia, commanding a 26.5% market share for overall Islamic financing.

Overall loans growth for the Group recorded an annualized growth rate of 3.8% after adjusting for loans written off. The retail and SMI segments continued to be the main drivers to this growth. Loans to SMIs grew at an annualized rate of 10.1%, automobile financing by 11.3% and credit card receivables by 9.7%, while that for consumer financing moderated to 7.5%.

Loan loss and provisions for the Group rose marginally to RM275.6 million for the quarter against RM268.2 million in the previous corresponding period. This included the write-off of RM29.8 million comprising the collateral value of non performing loans (NPLs) aged more than 7 years as well as an additional RM80.3 million which comprised 50% of collateral value of NPLs aged 5-7 years. These were in line with the more aggressive loan write-off policy implemented by the Group since June 2005 and resulted in the net NPL ratio of the Group improving further to 4.68% in September 2005 compared to 4.93% in June 2005.

If the impact of the additional provision required as a result of the writing down of the collateral value of long outstanding NPLs is excluded, the loan loss provision for the quarter would actually have recorded a decline of RM102.7 million or 38.3%.

The results of major subsidiaries were as follows:

Subsidiaries	Profit before tax for Quarter ended 30 Sept 2005 (RM mill)	Profit before tax for Quarter ended 30 Sept 2004 (RM mill)
Aseambankers Malaysia Berhad	15.6	26.3
Mayban Securities	7.7	7.6
Mayban Discount	21.5	14.8
Mayban General Assurance	22.1	22.9
Mayban Life	1.8	0.8

The performance of Aseambankers was affected by a decline in investment income and an increase in loan loss and provisions while Mayban Discount benefited from higher non-interest income arising from gains from the disposal of investment and trading securities. A notable achievement in the result of the insurance group was that of Mayban Takaful which recorded a turnaround with a pre-tax profit of RM124,935 compared to a loss of RM1.1 million previously.