KUALA LUMPUR (Feb 25): Malaysia Building Society Bhd (MBSB)’s net profit fell 73% to RM96.84 million in the fourth quarter ended Dec 31, 2020 (4QFY20), from RM356.69 million recorded in 4QFY19, mainly due to higher allowance for impairment provided in the period.

Its quarterly revenue declined to RM752.17 million from RM784.14 million, the financial services company's stock exchange filing today showed. MBSB did not declare any dividends for the quarter.

For FY20, the group’s annual net profit declined 62% to RM269.32 million from RM716.90 million, despite a 4.43% uptick in revenue to RM3.15 billion from RM3.01 billion, on higher gain on sale of financial investments. The weaker annual earnings was attributed to higher impairment losses and modification loss as a result of financing moratorium granted to customers last year.

Commenting on the group’s earnings, MBSB president and chief executive officer Datuk Seri Ahmad Zaini Othman said the group has made a gradual recovery in navigating the business under a highly uncertain economic environment.

“While we had been hit by substantial modification loss of RM504.75 million in FY20 due to the blanket automatic moratorium granted by the government, the modification loss has been more manageable now due to implementation of a more targeted assistance to those in need.

“Nonetheless, we will continue to assist our customers based on their financial situations,” he said in a statement.

MBSB's total assets slipped 4.48% or RM2.27 billion from RM50.71 billion in FY19, mainly due to a decline in interbank placements, while its deposits declined slightly to RM33.88 billion from RM35.89 billion.

Looking ahead, the group said it will continue to focus its businesses in selected sustainable sectors and drive greater growth and adoption of emerging technologies.

“We anticipate capital injections over the next three years, to further strengthen the bank group’s capital position.

“Aside from that, we will work on growing our fee-based income such as wealth management, and lower our gross impaired financing ratio,” Zaini added.

Shares of MBSB ended five sen or 0.74% higher at 68 sen apiece today, giving it a market capitalisation of RM4.74 billion.