KUALA LUMPUR (Jan 30): Malaysia Building Society Bhd (MBSB)’s net profit almost tripled in the fourth quarter ended Dec 31, 2017 (4QFY17) thanks to lower cost of funds and lower allowances for impairment losses.

Its net profit stood at RM123.98 million for 4QFY17, up 172% from RM45.64 million in the previous year, while revenue was slightly lower at RM818.27 million, versus RM819.4 million a year earlier.

The group announced a single-tier final dividend of five sen per share for the financial year ended Dec 31, 2017 (FY17).

For the full-year period, net profit more than doubled to RM417.13 million from RM201.41 million, while cumulative revenue retreated slightly to RM3.26 billion from RM3.27 billion.

“With the ending of the impairment programme in 4QFY17, we have achieved what we had planned when it was first initiated in 4QFY14. Our 4QFY17 and FY17 results were partly attributed to strengthened collection efforts, which in turn have reduced the impairment allowance for the year,” said MBSB president and chief executive officer Datuk Seri Ahmad Zaini Othman.

During the year, the group’s gross financing and loans contracted 3% to RM34.2 billion from RM35.28 billion amid reclassification of selected impaired retail financing and loans to financial assets held-for-sale. It said the sale of these assets are expected to be completed in 1QFY18.

Gross corporate financing and property financing saw annualised growth of 10.01% and 16.29% respectively.

“We remained selective in growing our financing assets but certain corporate segments have continued to be viable and we have managed to secure substantial financing stock moving into the new year from these segments,” said Ahmad Zaini.

MBSB’s asset quality improved, as its net impaired financing/loans (NIFL) ratio stood at 2.11% for FY17, versus 2.87% in FY16. The gross impaired financing/loans coverage stood at 139.52% from 109.24% in FY16.

Despite having its hands full with the Asian Finance Bank merger exercise, Ahmad Zaini said the group did not compromise on its deliverables for 2017.

“Collection and recovery efforts persisted throughout the year to ensure the resultant entity post-merger was premised on solid and healthy assets. This is key in bringing ourselves closer to a comparable position with the industry impairment ratios,” he said.

Going forward, he said MBSB is excited with the prospects of the new platform upon the completion of its merger exercise.

“While we shall remain committed to doing what has always been profitable, for example the affordable housing projects and the penetration in selected SME sectors but rolling out new products in the immediate years shall be a very positive development for the new entity.

“We intend to add value by establishing new delivery channels as this shall help to bring prospective customers on board,” he said.

MBSB's shares fell 2 sen or 1.68% to RM1.17 for a market capitalisation of RM6.99 billion.