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* Q1 net profit 1.02 bln rgt; EPS 14.53 sen vs 14 consensus
* Sees positive prospects given strong GDP growth
* Expects 2011 results to be better than 2010's
* Shares up 32.6 pct this yr, beating broad mkt (Adds quotes from company, results details)
By Fong Min Hun and Saumya Chakrabarty
KUALA LUMPUR, Nov 12 (Reuters) - Malaysia's largest lender Malayan Banking (Maybank) (MBBM.KL) posted a better-than-expected 16 percent rise in first-quarter net profit as domestic rate increases and growth in the bank's Indonesia operations boosted net interest income.
Malaysian banks have generally reported strong quarterly earnings as the economic recovery has spurred increased borrowing and greater capital market activities.
Maybank, which has a diversified loan portfolio in both consumer and commercial segments, said prospects for the bank were bright owing to strong GDP growth and to the country's planned development projects.
"Barring unforseen circumstances, the group expects its performance for the financial year ending June 30, 2011 to be better than the last financial year and is on track to meet its target ROE of 14 percent," the bank said in a statement.
Net profit for July-Sept was 1.02 billion ringgit ($327.8 million) compared with a profit of 881.8 million ringgit a year ago.
That translates to an earnings-per-share of 14.53 sen, exceeding Thomson I/B/E/S consensus earnings estimate of 14 sen per share.
Shares of Malaysian banks have surged since the start of the year, with almost all having outperformed the benchmark FBM KLCI index .KLSE.
Maybank's shares have gained 32.6 percent this year, outperforming the benchmark's 18.1 percent rise and just under Malaysia's top dealmaker CIMB's (CIMB.KL) 32.7 percent gain. Public Bank (PUBM.KL) shares have appreciated 14.4 percent.
The region's biggest lender, Singapore's DBS (DBSM.SI), posted a record quarterly profit earlier this month on the back of similar GDP trends, but the slowing recovery in developed markets could hurt the Singaporean bank. [ID:nSGE6A206H] ($1=3.112 Malaysian Ringgit) (Editing by Muralikumar Anantharaman)