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Strategic insights from Q3 FY-2024: A deep dive into Malaysian banks

As we delve into the financial performance of Malaysian banks for the third quarter of fiscal year 2024, it's essential to highlight the key metrics that portray the health and strategic direction of these institutions. This analysis covers Malaysia's leading banks—Affin Bank, AmBank Group, Bank Islam, Maybank, Alliance Bank, Hong Leong Bank, CIMB Group Holdings, RHB Bank, and Public Bank—offering a snapshot of their revenue, profitability, and fee-based income.

Revenue analysis

Malaysia's leading banks have demonstrated significant resilience and growth in Q3 FY-2024, with overall net revenues rising by 11.88% YoY, from USD 4.6 billion to USD 5.1 billion. This highlights strategic adaptation amid economic challenges, offering valuable lessons for banks across the APAC region.

Exhibit 1: Net revenue of top Malaysia banks  

*Figures in USD Billion
Source: Bank Financials, Twimbit analysis

Affin Bank

Affin Bank has achieved a remarkable 27.45% YoY increase in net revenue, growing from USD 108.1 million in Q3 2023 to USD 137.8 million in Q3 2024. This significant rise is driven by a 19.19% increase in interest income and a 17.71% growth in loans and advances.

Profitability analysis

Malaysia's top banks registered a solid 14.84% YoY increase in net profits, growing from USD 1.8 billion in Q3 FY-2023 to USD 2.1 billion in Q3 FY-2024. 

Exhibit 2: Net Profit of top Malaysia banks  

*Figures in USD Million
Source: Bank Financials, Twimbit analysis

Affin Bank

Affin Bank has once again demonstrated exceptional performance, posting a notable 50.98% YoY increase in net profit. The bank's net profit rose from USD 21.7 million in Q3 FY-2023 to USD 32.7 million in Q3 FY-2024. This surge in profitability is underpinned by an outstanding 106.2% YoY growth in operating profit.

Bank Islam

Bank Islam experienced a 4% decline in net profit, falling from USD 30.36 million in Q3 FY-2023 to USD 29.14 million in Q3 FY-2024. This decrease was primarily driven by an 11.38% rise in operating expenses, with corporate and commercial banking expenses increasing by 24.2%, while treasury expenses decreased by 20.6%.

Fee-based income analysis

Fee income across Malaysia’s leading banks saw a robust increase of 11.06% YoY, from USD 615.3 million in Q3 FY-2023 to USD 683.3 million in Q3 FY-2024.

Exhibit 3: Fee incomes of the top banks in Malaysia

*Figures in USD Million
Source: Bank Financials, Twimbit analysis

AmBank Group

AmBank Group recorded a significant 20.53% YoY increase in a key category, rising from USD 32.24 million in Q3 FY-2023 to USD 38.86 million in Q3 FY-2024. This growth was fueled by a 33.03% rise in fees and loans on securities and a 27.82% increase in brokerage fees and commissions.

Affin Bank

Affin Bank reported a 24.83% YoY decline, reducing from USD 22.25 million in Q3 FY-2023 to USD 16.73 million in Q3 FY-2024. This decrease is attributed to a 1.39% drop in commission and a substantial 26.23% decline in corporate advisory fees.

Non-performing loans (NPL)

Average non-performing loans across Malaysia’s leading banks saw a decline of 8.89% YoY, from 1.57% in Q3 FY-2023 to 1.43% in Q3 FY-2024.

Source: Bank Financials, Twimbit analysis

CIMB Group Holdings Berhad

CIMB Group Holdings Berhad reported a 28.13% YoY decline from 3.2% in Q3 FY-2023 to 2.3% in Q3 FY-2024. This decrease is attributed to 3.3% increase in its loans, advances and financing

Public Bank

Public Bank recorded a significant 6.9% YoY increase, rising from 0.58% in Q3 FY-2023 to 0.62% in Q3 FY-2024. This increase was fueled by a 14.36% increase in hire purchase receivables.

Cost Efficiency  

Average cost efficiency across Malaysia’s leading banks saw a minor increase of 0.6% YoY, from 47.66% in Q3 FY-2023 to 47.95% in Q3 FY-2024.

Source: Bank Financials, Twimbit analysis

AmBank Group

AmBank Group reported a 5.35% YoY increase, rising from 43% in Q3 FY-2023 to 45.3% in Q3 FY-2024. This increase was driven by an 8.17% rise in personnel costs and a 21.63% surge in marketing and communication expenses.

CIMB Group Holdings Berhad

CIMB Group Holdings Berhad reported a 0.85% YoY decrease in its cost-to-income ratio, falling from 46.9% in Q3 FY-2023 to 46.5% in Q3 FY-2024. This decline was primarily driven by an 8.2% reduction in depreciation of plant, property, and equipment, along with a 29.7% decrease in overtime expenses.

Lessons and insights for industry leaders

  1. Resilience and strategic adaptation: Malaysian banks achieved an 11.88% year-over-year increase in net revenue despite challenging economic conditions. This demonstrates the critical importance of agility in navigating market uncertainties. Banks should implement dynamic scenario planning, regularly recalibrating strategies to address shifts in economic indicators such as interest rate policies, inflation trends, and consumer sentiment.
  1. Cost management: Efficiency gains remain a priority across the sector as banks aim to mitigate margin pressures. Institutions should focus on adopting robotic process automation (RPA) for back-office operations, optimizing branch networks through data-driven location analysis, and consolidating non-core functions to streamline overheads. These targeted measures enable cost savings while safeguarding operational excellence.
  1. Fee-based income optimisation: The sector’s rise in fee-based income highlights specific opportunities in securities trading, brokerage services, and financial advisory. Banks should develop tailored advisory products for high-net-worth individuals (HNWIs), enhance digital trading platforms for retail clients, and forge strategic partnerships to broaden access to alternative investment opportunities. These initiatives can drive incremental growth in non-interest income.
  1. Data driven decision making: Data analytics must move beyond surface-level insights to guide precise actions. Banks should invest in predictive analytics tools to anticipate customer churn, optimize credit underwriting models with machine learning, and deploy sentiment analysis to refine marketing campaigns. Such initiatives allow institutions to align offerings with real-time market dynamics and deepen customer engagement.