KUALA LUMPUR (May 28): Malaysia Building Society Bhd’s (MBSB) net profit more than tripled to RMRM316.79 million or 5.33 sen per share for its first quarter ended March 31, 2018 (1QFY18), from RM101.32 million or 1.75 sen per share, due to allowance write back for impaired loans.

In 1QFY18, MBSB reported an allowance write back for impaired loans of RM154.4 million, compared with an allowance charge for impaired loans of RM167.92 million.

Its quarterly revenue was marginally higher by 0.47% to RM815.04 million, compared with RM811.2 million, the group said in a filing with Bursa Malaysia today.

Meanwhile, MBSB’s gross income from corporate loans and financing in the current period was higher compared to the previous year's corresponding period, due to continued growth of corporate loans and financing assets base.

MBSB's corporate disbursements amounted to RM1.1 billion in 1QFY18, representing 75% of the total quarter's disbursement of RM1.5 billion, the filing added.

“The expansion in corporate financing is in tandem with the Group’s commitment to achieve an optimum asset composition between retail and corporate mix of 70:30,” MBSB said in a separate statement today.

Conversely, the cost to income ratio (CIR) regressed to 26.71% from 22.62% (4Q17) and 19.72% (1Q17), MBSB noted.

“We had expected the rise in costs due to the merger exercise, as well as due to higher funding costs. Yet, it is worth highlighting that the CIR remains considerably better than the industry’s average of 49.7%,” its group president and chief executive officer Datuk Seri Ahmad Zaini Othman said.

Going forward, the group said it expects its prospects for the year to be satisfactory, barring any unforeseen circumstances.

From April 2, 2018, MBSB will continue to maintain its conventional receivables and perform conversion of these receivables into Islamic receivables over the next three years,  which will be subsequently vested into MBSB Bank.

Any residual receivables that are not converted will either be redeemed by the account holders or disposed off to a third party, the group added.

“We continue to build up MBSB Bank’s capabilities, following the corporate exercise. We have realigned the Group’s business, policies and operations and continue to make investments to upgrade and enhance the information technology infrastructure and delivery channels,” Zaini said.

“As a new Islamic banking group in the industry, the group looks forward to expanding its products and services, which include trade finance, wealth management and internet and mobile banking, to cater to various segments of our customers and depositors,” Zaini added.

At noon break, shares of MBSB were up two sen or 1.72% at RM1.18, with 1.95 million shares traded, for a market capitalisation of RM7.13 billion.