KUALA LUMPUR (Aug 26): BIMB Holdings Bhd's second quarter net profit rose 10.6% to RM143.71 million or 9.05 sen per share, from RM129.89 million or 8.42 sen per share a year earlier, on better earnings from its Islamic banking and takaful business.

The group said its net income for the quarter ended June 30, 2016 (2QFY16) increased 12.9% to RM595 million from RM526.99 million, while finance cost jumped 34.4% to RM28.17 million from RM20.96 million.

Revenue was up 9.6% to RM893.21 million from RM814.71 million, it said in a filing with Bursa Malaysia today.

No dividend was declared for the quarter.

For the cumulative six-month period (1HFY16), BIMB reported a 5% jump in net profit to RM278.97 million or 17.62 sen per share, from RM265.59 million or 17.26 sen per share in 1HFY15.

Net income grew 10.4% to RM1.17 billion from RM1.05 billion, while finance cost jumped 46.2% to RM56.45 million from RM38.61 million.

Meanwhile, 1HFY16 revenue increased to RM1.79 billion from RM1.62 billion a year ago.

BIMB said the Bank Islam group reported a 5.9% increase in profit after tax (PAT) to RM262.2 million for 2QFY16, attributable to growth in business activities.

The bank's net financing assets grew RM5.2 billion or 16.8% to reach RM36.3 billion. Correspondingly, fund based income from financing also increased by RM138.6 million or 15.4%.

Non fund based income was also higher by RM35.3 million or 24.9% and growth was mainly from investment income, said BIMB.

As at June 30, Bank Islam's customer deposits and investment accounts stood at RM42.4 billion with a year-on-year decrease of RM900 million or 2.2% in view of stiff competition for deposits among financial institutions in Malaysia.

The low cost current and savings accounts (CASA) reported a year-on-year decrease of RM200 billion or 1.5%. Nevertheless, the CASA ratio as at June 30 was 36.9% against the Islamic Banking Industry CASA ratio of 25% as at May 31.

The bank's gross impaired financing ratio improved to 1.05% while the net impaired financing ratio was negative 0.85% as at June 30, compared to 1.09% and negative 0.83% respectively as at Dec 31, 2015.

For the takaful segment, BIMB said Takaful Malaysia group's PAT grew 7.5% to RM85.3 million, mainly attributable to higher wakalah fee income.

Going forward, BIMB said cost and resource optimisation will be of paramount importance given the cautious operating outlook while syariah-led innovation will be maintained as another core focus as this anchors its ability to continue creating its own niche.

"Furthermore in an extremely competitive environment, being more customer-focused by continuously seeking to attain service excellence remains vital," it added.

For the takaful segment, BIMB said it will continue its value proposition of rewarding its customers with 15% cash back for general takaful products.

BIMB's share price gained one sen or 0.25% to close at RM4 today, giving the company a market value of RM6.36 billion.