MBSB income continues to decline on impairment losses


  • Business
  • Friday, 25 Nov 2016

Revenue for the period was 8.1% higher at RM830.25mil from RM768.03mil, the previous year, due to higher income from investments in liquid assets and higher financing income from corporate segment. This translated to basic earnings per share (EPS) was 1.18 sen from 2.24 sen.

PETALING JAYA: Non-bank lender MALAYSIA BUILDING SOCIETY BHD’s (MBSB) net profit fell 8.8% to RM57.93mil for the third quarter ended Sept 30, 2016 from RM63.53mil in the same period, a year ago, on higher allowances for impairment losses on loans, advances and financing.

Revenue for the period was 8.1% higher at RM830.25mil from RM768.03mil, the previous year, due to higher income from investments in liquid assets and higher financing income from corporate segment.

This translated to basic earnings per share (EPS) was 1.18 sen from 2.24 sen.

MBSM told the exchange that although the lender’s cost to income ratio was relatively consistent at 22%, contributions from operating business segments across the board were lower during the period, except for corporate loans and financing division.

“The gross income from corporate loans and financing in the current period was higher compared to the previous year corresponding period due to continued growth of corporate loans and financing assets base,” it said in its filings.

For the cummulative nine months, MBSB’s net profit dropped 43% to RM155.77mil from RM273.40mil, a year ago, on the back of a 10.4% hike in revenue at RM2.46bil from RM2.22bil. EPS dropped to 4.40 sen from 9.87 sen.

MBSB embarked on a ‘closing the gaps’ exercise since 2010 to bridge its framework to be in line with banking standards and best practices.

In a separate statement, the RM5.3bil market cap company said its total assets stood at RM44.53bil as at Sept 30, up 8.37% from RM41.09bil on Dec 31, 2015, mainly due to increase in liquefiable assets and growth in net financing and loans.

“Growth in gross financing and loans shows a positive trend of 1.64% at RM35.37bil in the third quarter compared with RM34.8bil in the second quarter,” it added.

MBSB president and chief executive officer Datuk Ahmad Zaini Othman said despite the adverse economic environment and its on-going impairment programme, third quarter performance shows improved profitability.

Its net impaired financing ratio stood at 2.91% as at Sept 30, 0.38% lower from the second quarter’s 3.29%.

Despite the challenging environment, MBSB’s deposit level was 10.05% higher at RM31.46bil in the third quarter compared with RM28.59bil in December 2015.

MBSB shares closed at 91 sen yesterday, down 1.5 sen.


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