KUALA LUMPUR (Nov 26): Malayan Banking Bhd (KL:MAYBANK), the country’s largest bank by assets, on Tuesday reported that its quarterly net profit rose 7.6% from a year earlier, as non-interest income growth offset a decline in net interest income.

Net profit for the three months ended Sept 30, 2024 (3QFY2024) was RM2.54 billion, Maybank said in an exchange filing. Year-on-year, net interest income slipped 1.9%, while income from Islamic banking rose 12%, and non-interest income, such as fees and commissions, was up 7.5%.

“The group maintains its target to achieve a headline key performance indicator of a return on equity of 11% for FY2024,” Maybank said. The return on equity was 11.1% in 3QFY2024 for the bank with over RM1 trillion in assets.

No dividend was declared for the quarter.

For the first nine months, net profit climbed 8.5% year-on-year to RM7.56 billion. Net fund-based income increased to RM14.66 billion supported by loan growth while non-interest income surged 26% to RM7.49 billion, thanks to fees and insurance business.

The initiatives and focus on “super-growth areas, particularly wealth management, bancassurance and the global banking mid-market segment, have yielded positive outcomes”, said group chief executive officer Datuk Khairussaleh Ramli.

“This is in addition to the prioritisation of maintaining a strong liquidity position while improving asset quality and preserving sound capital levels,” he said.

The net interest margin, a measure of profitability from interest charged on loans after paying returns on deposits, however contracted 14 basis points (bps) to 2.04% at the end of September. Gross loans grew 7.6% year-on-year, thanks to growth of key markets in Malaysia, Singapore, and Indonesia.

In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — improved by 8 bps to 1.26% while loan loss coverage stood at 125.8%.

The common equity Tier 1 capital ratio — a measure of a bank’s capital strength based on the highest quality of regulatory capital — came in at 14.72%.

Shares of Maybank slipped after the results were announced, down eight sen or 0.7% to RM10.22 at 3.30pm. At the last price, the company had a market capitalisation of RM123 billion.