‘LOAN GROWTH TO MODERATE’
BIMB expects growth between 6pc and 7pc to be above average, says CEO
BANK Islam Malaysia Bhd (BIMB) is optimistic its loan growth for its full financial year ended December 31 2019 (FY2019) to be above the industry average although moderating between six and seven per cent.
Bank Negara Malaysia’s (BNM) recent banking data showed loan growth slowed to 4.9 per cent year-on-year (y-o-y) in March this year versus five per cent y-oy in February.
Chief executive officer Mohd Muazzam Mohamed said BIMB’s first-quarter performance, to be announced later this month, was expected to be encouraging.
“Consumer banking segment remains as the main area of growth and (and) looking at fullyear 2019, it will continue to drive BIMB’s performance,” he said yesterday, adding that BIMB consumer banking business represented 60 per cent of its total assets and 75 per cent of financing.
For FY2018, BIMB’s profit before zakat and taxation (PBZT) rose 5.6 per cent to RM810.3 million against RM767.1 million previously.
Its gross financing grew by 8.9
per cent y-o-y to RM45.7 billion, following a robust growth in all segments — consumer (+9.6 per cent y-o-y), commercial (+9.8 per cent y-o-y ) and corporate (+4.3 per cent y-o-y).
Mohd Muazzam said other than financing growth, the fee-based incomes, such as wealth management services and bancatakaful arrangement, would be other areas of focus this year.
“For our fund management, we have a good brand — ‘Arabesque’, of which we had launched five funds,” he said, adding that BIMB was likely to ramp up sales to boost the segment.
Mohd Muazzam said the funds had outperformed the market due to robo-advisers which used Big Data technology and artificial intelligence.
He said the bank was keen to grow its Sadaqa House, a first-ofits-kind Islamic crowdfunding platform, as its latest agenda for social finance initiatives.
“This is a way for us to expand our role from being a traditional banking entity to become a provider of social finance which is embedded in our three-year business plan,” said Mohd Muazzam.
He said under the platform, BIMB worked on philanthropic activities, pooling fund from donors and worked with organisations to ensure money raised was channelled towards activities that created positive impacts on society.
Mohd Muazzam said the economic environment remaine challenging with BNM expecting Malaysia’s gross domestic product to moderate to between 4.3 and 4.8 per cent this year, which was lower than past years’ achievement.
BIMB would be impacted to a certain extent as it was exposed to consumer and commercial bankings, he said.
Mohd Muazzam said BNM cutting the Overnight Policy Rate (OPR) by 25 basis points was to help boost economic activities.
“As a consumer banking-oriented bank, when there are more consumer spending and investments, there will be more businesses coming to us,” he said.
Mohd Muazzam said the OPR cut would have a neutral impact on the bank’s financial performance this year, but it may have a temporary impact on earnings.
“There will be a timing impact, as any cut in the OPR would see an immediate impact on us as the financing rate will go down immediately. But for term deposits, the rate will only change when the account matures,” he said.