SHARES of Malaysia’s top lender Maybank fell as much as 5.5 per cent today on concerns over the outlook for the company, and the banking sector in general, amid slowing global economy.

Maybank shares were down 4.6 per cent to RM5.20 a share at mid-day. Malaysia’s benchmark share index was down 1.7 per cent at 875.15 points.

“We believe the digestion of a major acquisition, combined with an increasingly challenging economic environment and the potential of further impairments and earnings dilution, warrant a cautious view of near-term earnings growth,” said Macquarie Research in a note to clients today.

On Tuesday, Maybank reported a 22 per cent drop in first quarter net profit from the year-ago period to RM572.17 million due partly to an impairment loss on its investment in Pakistan’s MCB Bank.

Maybank told analysts after the results that its investment in Bank Internasional Indonesia (BII) will also be subject to impairment tests.

The tender offer for BII shares will close on November 19.

The bank also warned of the risk of greater non-performing loans as well as moderate loan growth, and said its net profit for the current financial year would be lower than the previous year.

Meanwhile, construction-to-plantation group IJM Corp fell 6.7 per cent to RM2.79 by mid-day, amid concerns of weaker second-quarter earnings, to be released later this month.

“Investors are concerned that most of the builders will report weaker results this quarter, and that is putting pressure on IJM shares,” said a dealer at a local brokerage house.

IJM Corp is scheduled to announce its Q2 corporate results on November 25.

“Investors are anticipating a weak set of numbers this quarter, and are also fearing that the next quarter could be even worse,” said the dealer. - Reuters