KUALA LUMPUR (Feb 28): Bank Islam Malaysia Bhd’s net profit for the fourth quarter ended Dec 31, 2021 (4QFY21) dropped 55.06% to RM79.64 million from RM177.21 million in the same period last year.  

The bank attributed the 4QFY21 net profit fall to higher allowance charged for impairment on financing and advances during the current period mainly due to expected credit loss provided to one non-retail customer which turned impaired in the period.

Bank Islam's gross impaired financing ratio rose to 0.96% as of Dec 31, 2021 compared to 0.67% in the financial year ended Dec 31, 2020 (FY20).

Notably, the bank reported higher net impairment on financing and advances in the 4QFY21 at RM111.18 million against a reversal of net impairment on financing and advances of RM3.54 million a year earlier.

Revenue for the quarter was up 7.57% to RM816.28 million from RM758.81 million in the same period a year ago, its filing with Bursa Malaysia showed on Monday (Feb 28).

No dividend was declared for the period under review compared with the 5.37 sen declared in 4QFY20. For the full year, Bank Islam had declared a 10.93 sen dividend, 0.01 sen higher the 10.92 sen declared in FY20.

Additionally, Bank Islam’s FY21 net profit fell 5.42% year-on-year to RM534.3 million from RM564.95 million, while revenue slipped 5.22% to RM3.17 billion from RM3.34 billion.

On prospects, Bank Islam said the domestic banking sector is expected to stay resilient in 2022 amid the challenges of the Covid-19 pandemic.

“Even as impairments begin to surface in the coming year, credit losses will be amply cushioned by healthy earnings accretion, comfortable provisioning buffers and solid capitalisation.

“Driven by the household segment with mortgages as the main driver, overall sentiments shall remain positive for the banking sector with continued support to viable consumers facing temporary financial difficulties through repayment assistance packages,” it said in its filing.

Subsequent to the completion of the restructuring in last year’s fourth quarter (4Q21), Bank Islam said the bank has become the first pure-play full-fledged Islamic financial institution listed on the Main Market of Bursa Malaysia.

“Consequently, the bank will have access to a wider and diverse capital base, allowing greater opportunity for future expansion programmes and business growth,” it added.

Meanwhile, Bank Islam group chief executive officer Mohd Muazzam Mohamed said the bank will remain committed to strengthening its balance sheet, upholding its strong asset quality, and enhancing cost efficiencies further, despite the continued challenging environment.

“While embracing changes stemming from the pandemic, the group will continue its pursuit of digital transformation to strengthen long-term business growth," he said in a statement.

Mohd Muazzam noted the group is committed to realising its five-year aspiration (LEAP25) to champion the Shariah-ESG total financing solution.

According to Mohd Muazzam, the bank has also set out to attune its 2022 key priorities to fortify its core business drivers and commit to cost management and optimisation.

“As a newly listed entity, the group is steadfast in implementing group synergy strategy, advanced digitalisation, and rev-up strategic partnerships,” he said.

At 12.30pm, Bank Islam’s shares were unchanged at RM3.23, bringing a market capitalsiation of RM6.94 billion.