But it was difficult to precisely predict the profits of any bank in Malaysia due to uncertainty surrounding their provisioning for various losses, the analysts said. With Malaysia in recession, the value of bad loans is expected to keep rising for a while yet.

Maybank, as it is more commonly known, has said it will announce results for the first half ended December 31, 1998, on February 25.

The group recorded a net profit of 5.7 million ringgit for the six months to end-December, 1997, and 129.6 million ringgit for the year to June 30, 1998. While none of the analysts provided estimates for the first half, their forecasts for the year to June 30, 1999, ranged from a pre-tax profit of 61 million ringgit ($16.05 million) from a Singaporean brokerage to a net profit of 540.5million from Malaysia's BBMB Securities.

Barra's The Estimate Directory consensus profit forecast of 27 analysts for the year to June 30 is 308.7 million ringgit. "I can say fairly confidently it will remain in the black in the first half. Everyone will focus on NPLs," said a banking analyst with the Singaporean brokerage in Kuala Lumpur.

According to BBMB Securities, rising NPLs will see further write-offs in Maybank's current Financial year, but there would be a general improvement in its bottomline. "Margins are expected to be squeezed with the interest rates fall outpacing that of cost of funds as well as the lower spread allowed but the slowing momentum of NPLs should help the bottomline in the next two years,"it said in a per cent report. Analysts said the Malaysian banking sector's NPLs would peak some time in the middle of this year if the economy shows strong signs of recovery.