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Maybank’s Q1 is still going up. Erm… quarters ahead?

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Maybank is Malaysia’s largest bank by total asset-size. It has just reported a growing profit for Q1 2020 versus a year ago. Movement Control Order (MCO) did not affect it?

Banks’ are a great sign of the market health. The market cannot be growing if the banks are not financing the growth. If the markets are in a crisis, the banks would also face the brunt of it. The Non-Performing-Loan (NPL) will also increase and this will soon affect its profit numbers too. Thus, we can say that banks’ quarterly numbers may also be reflective the country’s economic growth.

Article in themalaysianreserve.com Maybank’s net profit rose 13.3% to RM2.05 billion in Q1 2020 period. It recorded a 2% increase in revenue to RM13.22 billion in 1Q20 compared to RM12.98 billion posted a year ago. The reason it’s not so affected yet was because the MCO was only effective from 18th March 2020. However, this good news may not be continuous.

Group president and CEO Datuk Abdul Farid Alias said, “We expect the operating environment for the rest of 2020 to remain uncertain and sensitive to the kinetics of the pandemic, as well as the outlook for treatment and vaccines, which will have implications to public health and economic policies.”

Meanwhile Maybank’s allowances for impairment losses on loans, advances, financing and other debts rose by 59.2% or RM357.7 million to RM961.7 million in the quarter under review compared to 1Q19. Please do refer to the full article here: Article in themalaysianreserve.com

It’s super important to understand that the Q1 results cannot be repeated for Q2 or Q3 because the moratorium is in place and this will definitely reduce the overall revenue for all banks. What is extremely important to look at how they are already making allowances for impairment and this will give us an indication as to the ability of the bank to absorb the current slowdown in the market.

For those who think that perhaps Maybank can still be considered a good stock to buy, here’s their latest numbers from my friend Mr.google. It is showing a negative movement and its 52-week low is RM7. This is lower than the current share price. It’s highest was RM9.10 This is obviously a price which it managed to achieve before COVID-19.

I do not own any Maybank shares. Happy deciding and following yeah.

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Next suggested article: Profits are down. A sign of time perhaps

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