KUALA LUMPUR: MALAYAN BANKING BHD []'s earnings were RM1.028 billion in the first quarter ended Sept 30, 2010, up 16.6% from RM881.80 million a year ago, underpinned by improvements in all the divisions, including its Indonesian operations.

It said on Friday, Nov 12 revenue rose to RM5 billion from RM4.56 billion. Earnings per share were 14.53 sen versus 12.46 sen.

Maybank said the net interest income increased by 9% or 146.9 million due to improvements in the group's operations from higher net interest income margins in Malaysia arising from increases in the overnight policy rate and expansion of market in Indonesia.

It said income from Islamic Banking operations decreased by RM43.3 million or 11.3% to RM338.2 million due to higher provision for profit equalisation reserves in the Islamic business but mitigated by increase in growth in assets which increased gross income in Islamic business.

Maybank president and CEO Datuk Seri Abdul Wahid Omar said: "This quarter's results continue to bear testimony to the Group-wide transformation efforts that we have embarked on since 2008."

He said Maybank was renewing its focus on key markets across the region where we see significant opportunities to bring Maybank's unique brand of products and facilities to its stakeholders.

Wahid said of particular note was the significant progress the bank had made in its Indonesian operations, the third of our "home markets" after Malaysia and Singapore.

"Barring unforeseen circumstances, we expect our performance for the financial year ending June 30, 2011 to be better than the last financial year and on track to meet the targeted 14% return on equity," he said

Overall, the group's improved results were achieved on the back of higher profit across the key business pillars of community financial services and global wholesale banking's business segments of corporate banking and global markets, as well as significantly lower allowance for losses on loans.

Maybank's Indonesian operations led in loans growth with a robust 30% annualised increase followed by community financial services at 10% and Singapore operations at 5%.

The group's Islamic banking business also recorded strong financing growth of 25.8% which resulted in profit before tax more than doubling for the quarter. Maybank Islamic remains the largest Islamic bank by assets in the Asia Pacific region.

Maybank said the main factors for the improvement were:

* A 64% rise in profit before tax of community financial services which rose to RM542 million from RM331 million previously.

* Improved profit before tax by corporate banking which saw a 21.5% rise to RM164 million from RM135 million previously.

* Stronger performance in Islamic banking where profit before tax and zakat increased 167% to RM195.3 million compared with RM73.1 million previously

* Improved performance at PT Bank Internasional Indonesia Tbk (BII) which recorded Rp 84 billion pre-tax profit for the quarter compared to Rp 72 billion in the previous corresponding period.

* Higher profit before tax from Maybank Singapore which rose 3.6% to S$84.1 million from S$81.2 million previously

* Significantly lower allowance for losses on loans which declined 36.6% to RM 264.7 million from RM417.7 million previously

* Higher net interest income which rose 9.0% to RM1.77 billion for the quarter on the back of an annualised 4.6% growth in loans and debt securities across the group. This was despite a tightening of the net interest margin to 2.75% as at September 2010 compared with 2.82% in September 2009.

* Deposit growth of 8.7% to RM237.8 billion as well as asset growth of 12.3% to RM347.1 billion.