BIMB’s earnings grow despite lower Bank Islam profit

BANK ISLAM CORPORATE LOGO. AZHAR MAHFOF/The Star REPORTER: JOSEPH CHIN

KUALA LUMPUR: BIMB Holdings Bhd, the holding company of Bank Islam and Syarikat Takaful Malaysia, increased its earnings by 2.8% to RM547.27mil for the financial year ended Dec 31, 2015 (FY15) on 11.6% higher revenue of RM3.31bil.

In a filing with Bursa Malaysia, it said the Islamic banking segment’s profit before zakat and taxation (PBZT) fell 2.4%, or RM17.09mil, to RM685.66mil but this was more than offset by the 9.4%, or RM17.51mil, jump in Takaful Malaysia group’s PBZT to RM204.21mil. 

There was a 65.3% rise in the PBZT of the “others” segment - comprising investment holding, currency trading, ijarah financing, stockbroking and unit trust - to RM213.42mil.
 
Meanwhile, earnings for the fourth quarter rose 5.2% to RM161.86mil from a year earlier while revenue grew 16.1% to RM884.26mil.

BIMB said the decrease in Islamic banking’s profit for FY15 was mainly due to the finance cost incurred on the issuance of subordinated sukuk murabahah, higher cost of deposits and incremental operating expenses.

“The bank’s network expansion also contributed to the increase in operating expenses as five more branches were opened during the year bringing the total number to 144 branches to-date,” it said.

The 53.94% owned subsidiary of Lembaga Tabung Haji said the bank’s assets quality remained resilient with a low gross impaired financing ratio of 1.09% as at December 2015, lower than 1.14% registered as at December 2014.

“The strong asset quality is a result of the bank’s robust risk management and stringent underwriting standards. The bank also took a cautious stance by implementing measures in its approval processes as well as putting in efforts towards effective recovery processes,” it said.

BIMB said customer deposits grew by RM2.55bil or 6.21% to reach RM43.56bil as at December 2015. The current and savings (CASA) ratio stood at 35.03%.

On the takaful operations, BIMB said the higher profit was attributable to higher wakalah (service) fee income.

The takaful operating revenue, meanwhile, increased by 8.2% to RM1.79bil mainly due to higher sales generated by both the family takaful and general takaful business and higher net investment income.

BIMB shares fell 2 sen to RM3.52 on Friday.