KUALA LUMPUR, Nov 28 (Reuters) - Malayan Banking Bhd's (Maybank) MBBM.KL quarterly net profit rose as it swung to a gain from investment income and turned in higher net interest income as well as earned insurance premiums, helping offset costs.
The lender, however, said it expects its three home markets - Malaysia, Singapore and Indonesia - to be affected by moderate growth projection for Southeast Asian countries, with Singapore more exposed to impact from the U.S.-China trade war.
"Against the backdrop of a moderating global growth and uncertainty over trade tensions, Maybank Group will maintain its balance sheet expansion in line with the respective (gross domestic product) growth in its three home markets," it said in a filing with the stock exchange.
For the third quarter ended Sept. 30, Malaysia's largest lender by assets reported 2 billion ringgit ($480 million) in net profit, up about 2% from 1.96 billion ringgit a year ago.
The performance was slightly above an average estimate of the 1.99 billion ringgit from two analysts polled by Refinitiv.
Revenue rose 14.7% to 13.83 billion ringgit.
It saw a net gain in investment income of 805.6 million ringgit for the quarter, versus a net loss in investment income of 102.5 million ringgit a year earlier.
Maybank's net interest income rose 5.9% to 3.16 billion ringgit, while net earned insurance premiums from its insurance and Islamic insurance units jumped 22.3% to 1.75 billion ringgit. A rise in Islamic banking income also helped results.
The higher incomes in various segments offset a 77.6% rise in allowances for impairment losses on loans, advances, financing and other debts to 958 million ringgit during the quarter, as well as higher overhead expenses.
Net interest margin - a key measure of bank profitability - expanded to 2.32% from 2.19%.
Group President and CEO Abdul Farid Alias said 2019 has proven to be relatively challenging for some of the bank's clients due to the slower growth in global trade.
"We are therefore proactively working with them to restructure their facilities. In the meantime, we will continue to be vigilant in managing our assets quality while growing our portfolio," he said in a statement.
Loans growth has been positive at 3.4% for the three quarters, the bank said, driven by growth in Malaysia and its expansion in Greater China and Indo-China.
Maybank has also set a headline key performance indicator for its return on equity at 10-10.5%.
($1 = 4.1700 ringgit)
(Reporting by Liz Lee; Editing by Himani Sarkar)
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.