KUALA LUMPUR (Aug 28): BIMB Holdings Bhd posted a 30% jump in its net profit to RM195.16 million for the second financial quarter ended June 30, 2019, from RM149.91 million in the previous year's corresponding quarter.

Revenue for the quarter increased 16% to RM1.16 billion from RM992.17 million in the previous year's corresponding quarter.

The group said its Islamic banking operations, under Bank Islam Malaysia Bhd, achieved a 12% increase in profit before zakat and tax of RM217.5 million due to higher total income.

"Bank Islam's higher profit was mainly due to growth in business activities," said the group in a statement.

The bank saw higher fund-based income due to higher average net financing and advances during the quarter. Non-fund-based income also recorded an increase in investment income due to favourable result from the sale and revaluation of financial assets.

Net allowance for impairment on financing and advances increased during the quarter amid a spike in individual assessment.

The group said the bank's capital position remained healthy, with total capital ratio of 18.4% versus industry ratio of 17.5% as at May 2019.

For the takaful segment, which falls under Syarikat Takaful Malaysia Keluarga Bhd, profit before zakat and tax surged 58% to RM97.1 million from RM61.4 million a year earlier, attributed to increase in net wakalah fee income.

Operating revenue for Takaful Malaysia grew to RM672.9 million from RM542.4 million in the previous year, amid higher sales generated by the family takaful business.

For the first half of the financial year, net profit increased 23% to RM397.68 million from RM322.05 million a year earlier, while revenue rose 17% to RM2.34 billion from RM1.99 billion.

Going forward, BIMB is mainly positive on its outlook for the remainder of its current financial year.

It expects Bank Islam to maintain a stable profitability outlook despite the challenging economic environment.

However, net income margin (NIM) is expected to continue to be compressed following the reduction in the overnight policy rate (OPR) by Bank Negara Malaysia.

Moreover, the group expects competition for deposits to persist as banks brace for the implementation of the net stable funding ratio requirement.

Meanwhile, BIMB said the takaful industry is expected to outperform the conventional insurers amid strong demand in takaful products.

"Takaful Malaysia is poised to further expand its market share in 2019. To sustain its market leading position, the company will continue with its innovative strategies via the implementation of its digital strategy, introduction of online solutions, expansion of its distribution capabilities, strategic partnerships with leading Islamic banks and brand awareness initiatives," said the group.

At 12.30pm, BIMB shares were unchanged at RM4.05, giving a market capitalisation of RM7.15 billion.