MBSB 3Q profit rises 21% on lower impairment allowances

-A +A

KUALA LUMPUR (Nov 13): Malaysia Building Society Bhd (MBSB)’s net profit for the financial year ended Sept 30, 2018 (3QFY18) rose 21.07% to RM121.96 million from RM100.74 million a year ago, mainly due to lower impairment allowances on loans and financing.

"The lower charge was mainly due to improvement of staging from both Stage 1 and Stage 2 under MFRS 9 and higher 2017 impairment following the impairment programme,” MBSB said in a filing with Bursa Malaysia.

It was referring to a three-year impairment programme that the group completed in December last year, and its compliance to the impairment model under the MFRS 9 reporting method.

The stronger quarterly results pushed its earnings per share up to 1.97 sen from 1.7 sen, despite quarterly revenue shrinking 3.73% to RM786.41 million from RM816.87 million.  

MBSB said its gross loans and financing for 3QFY18 declined 0.6% y-o-y, mainly due to the proposed sale of personal financing, property financing and mortgage in 4QFY17 that amounted to RM1.51 billion.

MBSB’s cost to income ratio rose to 35.7% from 23% in 3QFY17, mainly contributed by higher operating expenses due to integration costs following its merger with Asian Finance Bank.

For the cumulative nine months (9MFY18), the group's net profit jumped 78.9% to RM524.44 million from RM293.14 million a year ago — though revenue fell slightly to RM2.4 billion from RM2.44 billion — for the same reasons that resulted in the stronger 3QFY18 earnings.

Year-to-date (YTD), the group’s gross loans and financing grew 4.83% to RM35.85 billion, mainly contributed by higher corporate financing disbursements.

Its total assets grew 3.55% to RM46.4 billion from RM44.81 billion as at end-2017, mainly due to higher gross financing/loans and liquefiable assets. Total deposits retreated RM1.03 billion or 3.13% to RM32.76 billion from end-2017.

On prospects, MBSB said its FY18 is expected to be "satisfactory" while the group focuses on continuing the expansion of the corporate business it undertook prior to the acquisition of AFB — now known as MBSB Bank Bhd, which was completed on Feb 7 — to reach the desired corporate retail portfolio mix.

"As a new Islamic banking group in the banking sector, the group is looking forward to expand 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.

MBSB shares rose one sen or 1.04% to close at 97 sen today, giving it a market capitalisation of RM6.26 billion.