What factors contributed to the RM2.49 billion net profit for Maybank in Q1 2024?

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Factors Contributing to Maybank's RM2.49 Billion Net Profit in Q1 2024

Malayan Banking Bhd (Maybank) reported a net profit of RM2.49 billion for the first quarter ended March 31, 2024. This increase was driven by a rise in revenue, growth in net interest and Islamic banking income, and a significant surge in other operating income, despite higher overhead expenses.
Increased Revenue and Core Banking Income

Maybank's revenue saw an upward trend, reaching RM18.35 billion compared to RM15.19 billion in the corresponding prior period. Furthermore, the bank's net interest income and Islamic Banking income collectively increased by 4.5 per cent, amounting to RM5.24 billion. This growth in core banking activities reflects a stronger performance in its primary lending and financing operations.
Significant Boost from Other Operating Income

A substantial contributor to the net profit was the increase in other operating income, which rose by 66.8 per cent to RM2.87 billion. This surge was primarily attributable to an unrealised mark-to-market gain of RM995.5 million on the revaluation of financial liabilities classified at fair value through profit or loss (FVTPL). Generally, FVTPL accounting requires assets and liabilities to be reported at their fair value, with changes recognised in the profit or loss statement. An unrealised mark-to-market gain signifies an increase in the value of these liabilities on paper, as their market price has risen, without the actual transaction having occurred.
Offsetting Market Fluctuations and Increased Expenses

While the revaluation of financial liabilities provided a gain, it was partially offset by an unrealised mark-to-market loss of RM1.145 billion on the revaluation of derivatives during the same quarter. Concurrently, the bank's overhead expenses increased by 19.8 per cent to RM3.66 billion. This rise in expenses was mainly due to higher personnel costs, administration and general expenses, establishment costs, and marketing expenditures. These factors represent the operational costs incurred by the bank in its business activities.

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What factors contributed to the RM2.49 billion net profit for Maybank in Q1 2024?

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