KUALA LUMPUR: Small Medium Enterprise Development Bank Malaysia Bhd’s (SME Bank) profit for its financial year ended Dec 31, 2014 (FY14) came in at RM18.9 million, down 70.2% from RM63.4 million a year ago, on a higher impairment provision of RM134.3 million.

However, the group’s operating profit in FY14 grew by 64.5% to RM163.6 million compared with RM99.5 million in the previous year, according to the group’s financial statement for the year.

In a press statement yesterday, SME Bank said continued growth in its Islamic banking business and ongoing efforts by treasury business in maximising non-banking revenue and maintaining optimal funding cost structure contributed to the group's year-on-year operating profit growth rate.

It said it disbursed RM2.9 billion worth of financing for FY14, 5.6% more than the previous year.

SME Bank group managing director Datuk Mohd Radzif Mohd Yunus said the bank’s financing portfolio stood at RM4.8 billion as at end December 2014, and that the bank’s three largest portfolio by industry were: wholesale, retail trade, restaurants and hotels (26.7%), manufacturing (19.8%), and education, health and others (16.3%).

“This performance is in line with the performance of Malaysian [small and medium-sized enterprises] which remained encouraging despite the difficult business environment,” said the bank.

It also noted that the government had announced during the National Budget 2014 three new funds with a total value of RM550 million for the group to enhance entrepreneurship.

Of that, SME Bank has approved about RM315 million under the Graduate Entrepreneurship Fund, Bumiputera Equity Fund and Malay Reserve Development Fund programmes.

This article first appeared in The Edge Financial Daily, on July 14, 2015.