By MARK RAO / Pic By MUHD AMIN NAHARUL

MALAYAN Banking Bhd (Maybank) recorded a net profit of RM2 billion for the July through September, period despite strong economic headwinds and thinning of interest margins for the overall banking sector.

Profit at the country’s largest bank improved 2% year-on-year (YoY), helped by a stronger than expected net interest, Islamic banking income and a higher contribution from its insurance subsidiary.

But other businesses like investment, wholesale and global ban-king dragged the largest listed firm on Bursa Malaysia based on market capitalisation.

Turnover jumped 14.7% to RM13.83 billion during the third quarter of 2019 (3Q19), despite a slower economy and a cut in the Overnight Policy Rate (OPR).

The bank also recorded higher allowances for impairment losses on loans, advances, financing and other debts, as well as higher overhead costs.

Higher net insurance benefits and claims had also reduced earnings for the insurance and takaful business segment.

The group’s investment banking posted a loss due to higher overheads and impairment losses. Maybank’s corporate banking and global markets segment also registered weaker earnings for the quarter due to impairments.

For the first nine months of 2019, Maybank — South-East Asia’s fourth-largest bank by assets — posted a net profit of RM5.75 billion although revenues improved by 13.6% to RM39.86 billion.

Gross loans, advances and financing amounted to RM525.03 billion in that period.

The central bank reduced the OPR in May, delivering a blow to banking stocks. Many local len-ders depended on the loan books and interest income as key revenue generators.

Shares in Maybank — Malaysia’s largest-listed corporate by market capitalisation — are down 10.3% year-to-date.

Maybank said it will maintain its balance sheet expansion in line with the respective economic growths in its three home markets — Malaysia, Singapore and Indonesia — and in tandem with its risk posture.

“The Maybank group will continue building on its diversified franchise and footprint to expand income streams through cross business collaborations and from focusing on diligent pricing of its assets and liabilities,” it said in a filing to Bursa Malaysia yesterday.

“Barring any unforeseen circumstances, the group expects its financial performance for 2019 to be satisfactory, in line with the expected growth prospects of its key home markets,” Maybank said.

Shares in the banking group closed six sen lower at RM8.52, giving the company a market capitalisation of RM95.76 billion.