Other factors that have contributed to its improved performance are solid asset quality and prudent funding and liquidity positions despite a global economic slowdown, HLB said in a statement today.

However, it said, recent turmoil in the US and European banking sector could lead to slower growth and threaten financial stability.

The banking group saw a 7.2% year-on-year (y-o-y) increase in gross loans and financing to RM174.2 billion.

Its income for the same period was up 6.9% y-o-y to RM4.4 billion, helped mostly by above-industry loan growth and healthy non-interest income.

Non-interest income rose 43.7% to RM919 million while net interest income remained stable at RM3.4 billion.

Of the RM174.2 billion gross loans, advances and financing, residential mortgages accounted for the lion’s share of RM87.7 billion. This was an 8.5% increase from the previous corresponding period.

Vehicle loans and financing rose 11.7% to RM19.2 billion in line with higher sales volume of motor vehicles, the banking group said.

Of the RM55.5 billion in loans to domestic businesses, which grew 7.3% y-o-y, small and medium-sized enterprises (SMEs) accounted for RM31.3 billion. This was up 10.6% from the previous corresponding period.

Group managing director and CEO Domenic Fuda said despite the solid performance, HLB would remain “cautiously optimistic” for the rest of the financial year.

He said a resilient domestic demand, underpinned by continuous expansion in private consumption and a pick-up in investments would help to cushion the impact of any headwinds and uncertainties in the global financial markets.

“The Malaysian economy is expected to expand at a decent pace of 4% to 5% in 2023,” he added.