MBSB’s 1HFY18 earnings slightly above expectations
KOTA KINABALU: Malaysia Building Society Bhd’s (MBSB) earnings for the second quarter of financial year 2018 (2QFY18) are out, leading analysts to see that the bank’s first half of financial year 2018 (1HFY18) results are slightly above expectations.
In a review report, MIDF Amanah Investment Bank Bhd (MIDF Research) saw that MBSB’snet profit for 1HFY18 had came in above expectations at RM402.5 million or 64 per cent of consensys full-year estimates.
The earnings were higher by 109.2 per cent year over year (yo-y), underpinned by a net writeback in 1QFY18 which saw a total of RM154.4 million recorded in impairment allowances and loans and financing.
Despite the well-received earnings, however, the quarter under review (2QFY18) saw earnings that were 5.9 per cent y-o-y lower and revenue that fell -2.4 per cent y-o-y to RM794.1 million.
According to MIDF Research, this was a result from lower income of financing activities that followed after the cessation of MBSB’s conventional business since 1QFY18.
“The decline in 2QFY18 earnings was attributable to temporary bump in cost, higher by +29.0 per cent y-o-y associated with the Asian Finance Bank (AFB) acquisition,” it said in its note yesterday.
“While revenue had been flattish in 1HFY18, we opine that growth is likely following the full adoption of MBSB banking platform in the future.
“This was on the back of healthy macro-economic performance coupled with the advancement of Islamic banking industry in Malaysia. Accordingly, MBSB as an Islamic financial institution is poised to benefit moving forward,” guided the research arm.
The rollout of new products from AFB may include trader finance and wealth management facilities but at this juncture, MIDF Research noted that it was worthy to keep in mind that the group has managed to maintain its loan growth forecast of 5 to 6 per cent in FY18 so far.
On the other hand, researchers at Kenanga Investment Bank Bhd (Kananga Research) were expecting AFB’s loans to grow by 3 to 4 per cent as it continues to be driven by corporates and mortgages.