KUALA LUMPUR (Feb 28): Malayan Banking Bhd (Maybank) is projecting a lower growth in its overall loan portfolio of between 6% and 7% for the year ending Dec 31, 2024 (FY2024), compared with the strong 9.2% year-on-year (y-o-y) growth it achieved in FY2023.

Speaking at a press conference on the bank's full-year financial results on Wednesday, Maybank group president and chief executive officer Datuk Khairussaleh Ramli said the projected growth will be broad-based driven by consumer consumption, private investments as well as infrastructure projects.

"This year we are still looking at a fairly reasonable and decent loan growth of between 6% and 7%. We think that it will come from a fairly broad base across these three home markets (Malaysia, Singapore, and Indonesia), as well as across various sectors within each country," he said.

Maybank, the country’s largest lender by assets, saw its total group gross loans grow 9.2% y-o-y in FY2023, lifted by increases in all home markets of Malaysia by 6.7%, Singapore by 8.7% and Indonesia by 6.2%.

The group's deposits, meanwhile, expanded by 9.0% y-o-y in FY2023 on growth across its Singapore (13.5%), Indonesia (9.4%) and Malaysia (4.9%) markets. Group fixed deposits were also up 11.2% mainly from growth in Singapore and Indonesia while group current account savings accounts (Casa) declined 1.7%, coming from Malaysia and Singapore.

On the other hand, Khairussaleh expects a lower net interest margin (NIM) compression of five basis points in FY2024, after the group saw a steep NIM decline of 27 basis points to 2.12% in FY2023, primarily due to higher funding costs and deposit competition.

"The impact of this competition was really felt from the end of 2022 and the cost then spilled over to the large part of the first half of 2023. That's where the big NIM compression came about. But towards the end of the third quarter and fourth quarter, we saw a huge moderation in that compression.

"While competition was really hot at the end of 2022, we did not see that at the end of last year. And with the expectation that interest rates will remain at this level throughout the year, we think that the impact from deposit expenses will be much less compared to last year," Khairussaleh explained.

Earlier on Wednesday, Maybank reported that its net profit for FY2023 climbed 17% to RM9.35 billion, from RM7.96 billion in the previous year. Net interest income fell 7.4% to RM12.79 billion on higher interest expenses on deposits for customers, while non-interest income surged 74% to RM7.98 billion, thanks to higher investment income and paper gains.

At market close, Maybank shares were unchanged at RM9.51 with a market capitalisation of RM114.69 billion.

Read also:
Maybank's 4Q net profit rises 8.3%, declares 31 sen dividend