BIMB 4Q profit up 156%, full-year profit higher at RM532m

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KUALA LUMPUR (Mar 13): BIMB Holdings Bhd reported a 156% jump in fourth quarter net profit from a year earlier as the Islamic financial-services provider registered higher revenue and lower taxes.

Lower minority interest also supported bottom line growth, BIMB (fundamental: 2.7; valuation: 1.8) told Bursa Malaysia today.

BIMB said net profit rose to RM153.91 million in the fourth quarter ended December 31, 2014 (4QFY14) from RM60.15 million while revenue was higher at RM761.5 million versus RM729.08 million.

Profit before tax fell to RM219.85 million from RM220.7 million.

BIMB's income statement showed that revenue had grown on higher income from investment of depositors' funds and as insurance net income rose. The group paid lower taxes of RM51.22 million compared to RM75.84 million.

Minority interest fell to RM9.5 million from RM78.57 million.

BIMB's full-year net profit rose to RM532.33 million from RM279.33 million a year earlier. Revenue was higher at RM2.97 billion versus RM2.81 billion.

Looking ahead, BIMB is however mindful of profit margin compression due to industry competition for depositors' funds.
 
The group also expects slower loan growth in 2015 compared to 2014.

"The banking sector will continue to experience intense competition and margin compression as banks keep on competing for funds to manage loan/deposits and liquidity coverage ratio requirements.

"Despite the challenges ahead, the industry loan is likely to grow at a range of between 7% and 8% in 2015, slightly lower than the 8% to 9% expected to be recorded for 2014.

"Similarly, Islamic banking financing is still expected to register double digit growth this year mainly attributed to the government’s continuous effort to support the industry as previously mentioned during the tabling of Budget 2015," BIMB said.

At 12:30pm today, BIMB shares fell five sen or 1.2% to settle at RM4 for a market capitalisation of RM6.17 billion.

The stock had fallen 1.7% this year versus the FBM KLCI's 1.5% rise.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)