KUALA LUMPUR (May 24): Malayan Banking Bhd (KL:MAYBANK), Malaysia’s biggest banking group by assets, posted a record net profit of RM2.49 billion for the first quarter from a year earlier, thanks to increases in both net interest income and non-interest income.

Net profit for the three months ended March 31, 2024 (1QFY2024) rose 9.8% to RM2.49 billion compared with RM2.27 billion a year ago, Maybank said in an exchange filing.

Net interest income rose 4.5% year-on-year to RM5.24 billion. Non-interest income surged 78% to RM3.05 billion against 1QFY2023, largely due to accounting gains of RM995.5 million in the form of mark-to-market gains on revaluation of financial liabilities at fair value.

Looking ahead, Maybank said it is capitalising on identified business growth by expanding in key areas of group community financial services, group global banking, and group insurance and takaful in its home markets, driven by a better regional economic outlook.

“Our leadership in sustainability puts us in a good position to exceed our set targets to deploy sustainable financing and decarbonisation solutions, not only to our large corporate customers, but also to mid-sized and small firms,” chief executive officer Datuk Khairussaleh Ramli said in a statement.

In 1QFY2024, Maybank’s gross loans grew 11.2% from a year earlier, while deposits expanded 8.9%.

The bank's net interest margin — a measure of profitability from interests charged on loans after deducting returns paid to depositors — declined 19 basis points or 0.19 percentage point to 2% from 1QFY2023, due to higher funding cost across the home markets.

In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — improved by 18 basis points to 1.32%, while loan loss coverage fell to 127.3% from 133.5% in 1QFY2023.

“The group continues to undertake proactive engagement with clients facing financial challenges by assisting them in managing their commitments effectively,” Maybank noted.

Maybank’s common equity tier 1 capital — a measure of a bank’s capital strength based on the highest quality of regulatory capital – was 14.87%, while the liquidity coverage ratio remained stable at 127.2%, above the regulatory requirement of 100%.

No dividend was announced. The lender usually announces dividends with its second- and fourth-quarter results.

Shares in Maybank closed down one sen or 0.1% at RM9.98, valuing the bank at RM120.43 billion.