KUALA LUMPUR: Malayan Banking Bhd's (Maybank) net profit doubled to RM1.03 billion in the third quarter ended March 31, 2010 (3QFY10) underpinned by higher non-interest income and Islamic banking operations.

It said on Thursday, May 13 the strong profit performance, compared with RM503.28 million a year ago, was also due to sharply lower loan loss provisions. Revenue rose 8% to RM4.59 billion from RM4.26 billion while earnings per share rose to 14.56 sen from 9.15 sen.

Maybank said net interest income rose 8% to RM1.67 billion from RM1.54 billion a year ago while allowance for losses on loans, advances and financing was reduced by 47% to RM215.52 million from RM409.81 million.

For the quarter, it booked a RM42.5 million gain versus impairment losses of RM67.19 million a year ago earlier while it recorded non-interest income of RM1.18 billion, up 82% versus RM647 million.

Maybank president and CEO Datuk Seri Abdul Wahid Omar said the strong performance across all its business sectors demonstrated its leadership in the Malaysian financial services sector and the strength of its international operations, particularly in Singapore and Indonesia.

He was upbeat about the prospects in the coming year following the synergy it was deriving from its enlarged network, and the growing trade and investment flows seen regionally.

Abdul Wahid also said the group would implement a new structure effective July 1.

"Key business growth areas will be segmented into three pillars in the new house of Maybank namely community financial services, global wholesale banking, and insurance and takaful with the support of enterprise transformation services and the corporate office.

"Distribution will be further streamlined with branches being sales outlets for the group's products and services and covering all customer segments,” he said.

Maybank chairman Tan Sri Megat Zaharuddin Megat Mohd Nor said the strong growth momentum which was continuing into the group's final quarter clearly pointed to the significant strides it had made in the last year to strengthen capital, enhance organisational capabilities and drive change throughout the organisation.

For the nine-month period, its earnings rose 60% to RM2.91 billion from RM1.81 billion a year earlier. Revenue was 8% higher at RM13.82 billion from RM12.73 billion. Earnings per share rose to 41.05 sen versus with 32.91 sen. Net assets per share rose to RM3.80 from RM3.52 as at June 2009.

Maybank said net interest income rose 14.3% to RM4.98 billion despite a tightening in net interest margin to 2.76% as at March 2010 compared to 2.79% a year earlier, on the back of annualised loans growth of 7.6%.    

Non-interest income registered a 79% growth to reach RM3.54 billion from RM1.97, aided by robust increase in investment and trading income as well as foreign exchange profit, which rose to RM179.7 million and RM388.1 million respectively from RM78.1 million and RM153.9 million.

Allowance for losses on loans, advances and financing declined 4.3% to RM876.8 million compared with RM916.3 million previously.

Net non-performing loans (NPL), advances and financing was RM2.48 billion as at March 2010, an improvement from RM2.86 billion a year ago. Net NPL ratio declined to 1.36%.

Loan loss coverage strengthened  to 120.5% as at March 2010 compared to 101.5% in March 2009.

Customer deposits in the nine months grew 9.5% to reach RM231.9 billion from RM211.7 billion a year ago. The group's loan-to-deposit ratio stands at 84.8%.

The group's total assets rose 7.9% on an annualised basis to RM329 billion as at March 2010 from RM310 billion in June 2009. Its risk weighted capital ratio remains robust at 14.5% as at March 2010 while Tier-1 capital ratio stood at 10.67%.

Overall loans grew 7.6% on an annualised basis, which was impacted by the strengthening of the ringgit. Excluding the effect of the strengthening ringgit, gross loans grew 8.8% on an annualised basis.

For the domestic operations, loans grew at an annualised rate of 8.7% driven by a robust 13.8% increase in consumer loans and a 4% rise in business loans.

Consumer banking continues to be the key driver of Maybank's overall operations, raking in RM3.3 billion revenue. Consumer loans growth was fuelled by stronger demand for financing of securities, a major part of which is for unit trust investments, which rose by 27.3%, automobile up 14.1%, mortgage up 9.7% and credit card receivables up 12.1%.

Corporate banking, which posted RM1.83 billion revenue, was driven by an overall 4% annualised increase in loans, contributed by a 9.9% rise in corporate loans that more than offset the 9.4% decline in SME loans.

For its global markets segment, total income for 9MFY10 more than doubled to RM1.11 billion from RM527.8 million previously. Of this, 43% was generated from fixed income investments.

Maybank insurance arm Etiqa's combined gross premium rose 18% in the nine-month period, aiding the insurance and asset management segment revenue to rise to RM707 million.

Its investment income saw a 211% rise in total income of which fee-based income recorded a 142% increase, mainly due to the equities business and debt markets.

Islamic banking operations  saw a 14.3% increase in gross attributable income for the nine months to RM1.34 billion from RM1.17 billion previously.

Loans in the group's international operations grew 5.1% on an annualised basis led by Singapore operations, which saw loans growth of 9.5% (in Singapore dollar terms), and Bank Internasional Indonesia (BII) that rose 18.1% (in rupiah terms).

Overhead expenses for the nine months were 18.6% higher compared with the previous year, mainly due to the inclusion of BII figures for the period.

In the previous corresponding period, the overhead cost of BII was consolidated only from the second quarter beginning October 2008.

On outlook, Maybank expected normalised revenue growth to exceed 15% for the current financial year compared to the earlier target of 8%. Its normalised return on equity (ROE) is expected to be in excess of 13% compared to the 11% target set earlier.