It said in a statement that the weaker performance was cushioned by higher net interest income and income from the Islamic banking business.
For the quarter under review, revenue was RM537.83mil, 13.95% lower than in the comparative quarter.
Earnings per share was 3.31 sen versus 6.22 sen in 1Q20.
"ABB Group is mindful of the on-going downside risks due to the pandemic that could pose disruptions to the banking business.
"Prudent risk management practices and cost containment measures will remain on the Group’s business strategy so that the Group can continue to withstand the uncertainties and respond appropriately to any changes to the operating environment," said president and CEO Datuk Wan Razly Adullah Wan Ali.
According to the group, net interest income rose 11.1% year-on-year (y-o-y) to RM192.6mil due to improved net interest margin backed by an increase in overall current account savings account (CASA) composition and lower cost of funds.
As at end-March, the CASA ratio improved to 23.11% as compared to 17.95% a year earlier.
In Islamic banking, the income grew 7.7% to RM128.9mil due mainly to higher net profit income and lower allowance for impairment losses.
The bank's other operating income fell 34.9% from 1Q20 to RM216.1mil due to lower net gains on financial instruments of RM162.7mil.
This was partially offset by bank fee-based income, which grew 84.1% to RM39.6mil.
Operating expenses rose 4.3% y-o-y to RM340.5mil. The cost-to-income ratio rose to 63.33% in 1Q2021 against 52.25% in 1Q2020 due to the lower revenue from capital markets.
Total loans grew 3.3% y-o-y to RM47bil, due mainly to community banking growing 7.4%.
The bank's CASA grew 28.6% y-o-y to RM11.7bil, which brought its CASA ratio higher to 23.11% from 17.95% a year earlier. Total customer deposits stood at RM50.6bil.
As at March 31, the gross impaired loan ratio was 3.41% against 3.11% as at the same quarter last year.
The group said total capital ratio remained strong at 21.27% and CET1 stood at 13.8% as at end-March.