KUALA LUMPUR (Nov 23): Malaysia Building Society Bhd (MBSB), which is 65.6% controlled by the Employees Provident Fund, saw its net profit surge 73.9% to RM100.74 million in the third quarter ended Sept 30, 2017 (3QFY17) from RM57.93 million a year ago, on lower allowance for impairment losses on financing/loans and advances, as well as a lower cost of funds.

Earnings per share rose to 1.7 sen from 1.18 sen in 3QFY16. Quarterly revenue, however, slipped 1.6% to RM816.87 million from RM830.25 million.

For the nine-month period ended Sept 30, 2017 (9MFY17), MBSB reported an 88.2% jump in net profit to RM293.14 million from RM155.77 million a year ago, while revenue fell marginally to RM2.44 billion from RM2.45 billion.

"We had utilised substantial time and efforts to ensure that the negotiation of the proposed merger with the Asian Finance Bank (AFB) would conclude favourably for both parties, while implementing our strategic business plans to achieve the [key performance indicators]," MBSB president and chief executive officer Datuk Seri Ahmad Zaini Othman said in a statement today.

"We're indeed encouraged that we are on track to accomplish both objectives," he added.

He expects to conclude the share purchase agreement between the group and AFB shareholders in the first quarter of 2018, which will then mark a new beginning for MBSB.

The group posted a year-to-date (YTD) growth of 2.27% to RM36.09 billion for its gross financing/loans and advances, and a 3.89% YTD growth in its total assets to RM44.95 billion.

MBSB said the upward trend in gross financing/loans and advances is mainly due to the expansion in corporate and property financing, which has helped to partly offset the contraction in retail segment.

On deposits from customers, the group recorded a 5.3% increase in deposits to RM33.14 billion in 3QFY17 from RM31.46 billion in 3QFY16. The drive for deposits continues to be supported by the corporate and institutional clients.

It also showed improvements in profitability indicators with net return on average equity at 5.69% in 3QFY17 against 3.59% a year ago.

MBSB's net return on average assets stood at 0.89% in 3QFY17, which had progressed from 0.49% in 3QFY16. Meanwhile its cost-to-income ratio of 21.93% in 3QFY17 is a further reduction of 0.9 percentage points from 22.80% in 3QFY16.

Zaini said the group will complete its impairment programme by the end of this year as targeted.

"We continue to advance towards 70:30 asset composition between retail and corporate with September position showing 78:22. Meanwhile, close to 90% of our asset portfolio are Islamic.

MBSB shares closed down one sen or 0.9% at RM1.09 today, for a market capitalisation of RM6.46 billion.