August 30, 2018 / 9:44 AM / 3 months ago

UPDATE 1-Malaysia's Maybank Q2 profit rises 18 pct on drop in provisions

* Q2 profit 1.96 bln ringgit vs 1.66 bln ringgit year prior

* Revenue rises 5 pct; provisions fall 30 pct

* Expects 2018 financial performance to be “satisfactory” (Adds CFO comments on loan growth)

KUALA LUMPUR, Aug 30 (Reuters) - Malayan Banking Bhd (Maybank), Malaysia’s largest lender by assets, on Thursday posted an 18 percent jump in second-quarter profit due to lower expenses and allowances for loan losses.

Net profit for April-June was 1.96 billion ringgit ($477.47 million), versus 1.66 billion ringgit in the same period a year prior. That was in line with the 1.9 billion ringgit average of two analyst estimates compiled by Reuters.

Revenue rose 5 percent to 11.51 billion ringgit. Allowances for impairment losses on loans and other debt fell 30 percent to 582.1 million ringgit.

Maybank said it expects its financial performance for 2018 to be “satisfactory,” and that it targets return on equity of about 11 percent for the year.

Chief Financial Officer Amirul Feisal Wan Zahir said loan growth would be driven by the bank’s consumer business, and that growth in corporate loans will slow.

“We do see strong momentum in our consumer growth for Malaysia, however on the corporate side, we see the momentum slowing down a bit,” Amirul Feisal said.

Rival CIMB Group Holdings Bhd, Malaysia’s second-largest lender, on Wednesday posted an increase in quarterly profit. It also said its consumer banking business has been positive since a general election in Malaysia in May.

The new government led by Prime Minister Mahathir Mohamad scrapped a consumption tax soon after coming to power, leading to a rise in consumer spending. Concerns nevertheless remain as economic growth is widely expected to slow this year.

Malaysia cut its growth forecast for 2018 and reported a slower second quarter two weeks ago, in part attributed to uncertainty brought by a change in government.

($1 = 4.1050 ringgit)

Reporting by Rozanna Latiff and A. Ananthalakshmi; Editing by Himani Sarkar and Christopher Cushing

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