PETALING JAYA: MALAYSIA BUILDING SOCIETY BHD (MBSB) suffered a net loss of RM15.81mil in the fourth quarter ended Dec 31, 2015, compared with a net profit of RM393.07mil in the previous corresponding period, mainly due to allowances for higher impairment losses.
Revenue for the quarter under review grew 39% to RM825.69mil from RM594.33mil a year earlier.
For the financial year ended Dec 31, 2015 (FY15), net profit plunged to RM257.59mil from RM1.02bil in the previous corresponding period, while revenue rose to RM3.05bil from RM2.61bil a year earlier.
MBSB said in a stock exchange filing that the decrease in the net profit was mainly due to higher allowances for impairment losses on loans, advances and financing with the continuation of the impairment program initiated by the company in the fourth quarter of 2014.
“In 2015, the impairment program contributed 75% of the total allowance for impairment losses.”
The company embarked on a “Closing the Gaps” exercise from 2010 to bridge its frameworks so as to be in line with banking standards and best practices.
The impairment program, which is in line with the recommendation by Bank Negara , is in addition to the existing impairment provision that is in compliance with current accounting standards.
“The impairment program will end in 2017 with an estimated average credit cost of 2% for each year based on gross loans/financing of RM34bil as at Dec 31, 2015.”
MBSB also proposed a single-tier final dividend of 3%, amounting to RM85.16mil, for FY15.
In a separate statement, MBSB said total assets of RM41.09bil as at Dec 31, 2015 registered a growth of 9.09% or RM3.42bil from RM37.67bil for the previous financial year.
“Gross loans and financing growth also shows an improved trend of 4.38% from RM33.81bil in the preceding third quarter to RM34.11bil in the fourth quarter 2015.
“The company continued to achieve an impressive low cost to income ratio of 22.66% for financial year 2015, which is a further improvement of 0.19% from 22.85% in the preceding quarter.”
It added that net impaired financing ratio which stood at 2.81% as at Dec 31, 2015 was a marked reduction from 4.05% recorded in the preceding year 2014.
It is also a progress of 0.41% from 3.22% recorded as at Sept 30.
On this, MBSB president and chief executive officer Datuk Ahmad Zaini Othman (pic) said:
“We are definitely pleased that the company’s non-performing loans (NPL) continued to show a positive trend, which are the results of effective non-performing loan preventive measures as well as strengthened credit underwriting processes.”
On MBSB’s prospects moving forward, Ahmad Zaini said he was optimistic about the company’s prospects, despite the unfavourable economic conditions.
“The uncertainties have to a certain extent, hampered both retail and corporate sentiments.
“But for MBSB, we are operating quite efficiently as reflected by a low cost to income ratio and we intend to further reduce that this year, the retail segment largely comprises of government servants indicating stable employment meanwhile growth in corporate segment shall be continued to be sustained via selected government contracts and viable private projects.”
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