UPDATE 1-Malaysia's Maybank Q3 net profit slips 34 pct

*Sees lower full year profit compared with FY2008

*BII goodwill impairment charge to be finalised by June

*Sees further pressure on margins, higher NPLs

*Shares dropped 1.9 percent before earnings

(Adds details)

KUALA LUMPUR, May 21 (Reuters) - Malaysia's largest lender, Malayan Banking Bhd (Maybank) (MBBM.KL), said on Thursday its third-quarter net profit fell more than a third, and warned that business conditions will remain challenging for the rest of the year.

"We are seeing lower profit performance impacted largely by higher provisioning for our international operations and impairment costs resulting from our recent regional acquisitions, said Abdul Wahid Omar, Maybank's chief executive officer, in a statement.

State-controlled Maybank, which made a string of overseas acquisitions last year, said January-March net profit slipped to 503.3 million ringgit ($142.9 million) from 758.6 million ringgit a year earlier.

Revenue grew 14 percent to 4.265 billion ringgit in the three-month period.

Analysts in Malaysia do not provide quarterly forecasts but said there had not been a significant deterioration in the asset quality of Malaysian banks.

Maybank said it expects to finalise a goodwill impairment analysis on its Indonesian unit Bank Internasional Indonesia (BNII.JK) by June.

The lender expects to make a smaller profit for the full year compared with the previous year as recent acquisitions have yet to be earnings accretive and there are potential impairment charges.

"The highly competitive banking landscape, together with an environment of lower interest rates and more challenging business and employment prospects, could lead to pressure on margins and rising non-performing loans," said Maybank, which has a market capitalisation of about $10.6 billion.

Singapore's DBS Group (DBSM.SI), Southeast Asia's biggest bank, recently announced a smaller-than-expected 28 percent drop in first-quarter profit and voiced optimism about its outlook on signs the financial crisis was easing. [ID:nSIN451332]

Abdul Wahid told Reuters in an interview earlier this month that he expects "some small deterioration" in asset quality towards the end of the year. [ID:nSIN463620]

Before the results were announced, analysts had expected Maybank to post a net profit of 2.4 billion ringgit for the full year against the 3.2 billion ringgit it made last year.