KUALA LUMPUR: MALAYSIA BUILDING SOCIETY BHD (MBSB) posted lower net profit of RM83.83mil in the first quarter ended March 31, 2019 due to higher expected credit losses (ECL).
MBSB said on Wednesday the net profit slumped from RM316.79mil a year ago. Revenue declined by 3.8% to RM784.04mil from RM815.04mil a year ago. Earnings per share were 1.31 sen compared with 5.33 sen.
Group president and CEO Datuk Seri Ahmad Zaini Othman said: “Despite the on-going challenges including the impact of higher expected credit losses, we are registering stable growths in revenue, net operating income and still maintained a cost to income ratio of 26.34% which is below the industry average."
Main points of Q1 FY19 results:
Revenue of RM784.04mil increased by 4.49% from RM750.35mil on-quarter.
Total assets grew by 2.12% on-year and 4.41% on-quarter to RM47.43bil.
Deposits increased by 5.82% to RM34.70bil compared to RM32.79 on-quarter.
Net operating income increased to RM268.88mil, up 9.39% on-quarter from RM245.81mil and up 5.54% on-year from RM254.77mil.
Profit before tax (PBT) recorded at RM115.86mil fell 26.9% from RM158.62mil on-quarter and 71.6% from RM409.16 million on-year.
Net profit fell by 28.9% to RM83.83mil from RM117.96mil on-quarter and 73.5% from RM316.79mil on year.
Gross loans and financing of RM35.44bil was consistent with RM35.17bil on-quarter.
Gross impaired loans, financing and advances coverage ratio improved to 114.47% compared to 106.03% on-quarter.
MBSB said its revenue grew by 4.49 % to RM784.04mil in Q1 FY19 from RM750.35mil in Q4 FY18 mainly contributed by financing and investment in financial instruments from Islamic banking operations.
MBSB Group president and CEO Datuk Seri Ahmad Zaini Othman said: “Despite the on-going challenges including the impact of higher expected credit losses, we are registering stable growths in revenue, net operating income and still maintained a cost to income ratio of 26.34% which is below the industry average."
“Net income is recorded at RM365.03mil (Q1 FY19) an improvement by 11.12% from RM328.51mil (Q4 FY18) and 5.01% from RM347.63mil (Q1, FY18),” he said.
Ahmad Zaini said group deposits totalled RM34.70bil (1Q19), a 5.82% growth compared to RM32.79bil in 4Q18.
Total assets grew by 2.12% to RM47.43bil from RM46.45bil a year ago contributed from investments in financial instruments portfolio under Global Markets Division.
Business expansions in the corporate segment continued to improve the asset composition ratio between retail and corporate to 74:26 compared to 75:25 (4Q18), progressively moving towards the croup’s target of 60:40 by year 2020.
On the outlook for 2019, Ahmad Zaini said: “While the Malaysian economic condition remains challenging, we will remain focused in expanding our banking capabilities. With this, the bank’s technology transformation shall continue to be in the centre stage.
“On another front, we also aim in increasing our fee income based activities to make up 35% of its income by end of 2020.”