MBSB post-tax profits rises 54 per cent to RM642.40 million
KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) reported its profit after tax (PAT) of RM642.40 million for the full Financial Year Ended December 31, 2018 (FY18), a significant increase of RM225.27 million compared to RM417.13 million posted in the previous year due to lower impairment allowances and partly set off by higher operating expenses.
On the results’ announcement, MBSB’s group president and chief executive officer Datuk Seri Ahmad Zaini Othman, said 2018 was an eventful year as it completed the successful acquisition of Asian Finance Bank Berhad on February 7, 2018.
“We had only merged the business and operations of the two entities on 2 April 2018. From then on, we began implementing our plans to build up the core banking capabilities for the new merged entity.”
The group’s revenue at RM3.15 billion for FYE18 is consistent with RM3.26 billion recorded in FY17. Quarterly revenue also reflects consistency at RM750.35 million (4Q18) against RM786.40 million (3Q18).
The Group’s Cost to Income ratio (CIR) of 29.53 per cent regressed from 19.56 per cent in FY17 due to the increase in staff and higher operating costs from investments in IT infrastructure and distribution channels.
Nevertheless, MBSB’s CIR still remained well below the industry’s average of 50.1 per cent.
Net Profit Margin (NPM) stood at 3.06 per cent, mainly contributed by Personal Financing, Corporate and Global Market portfolios. The Net Return on Equity (ROE) stood at 8.62 per cent trending upwards. Similarly, Net Return on Assets (ROA) moved up to 1.42 per cent.
On the group’s 2018 performance, Ahmad Zaini stated, “95 per cent of 2018’s income was derived from the existing lines of business and the remaining five per cent from new offerings.
“This was within our expectations as we had focused our time and resources significantly on building the banking infrastructure to enable us to roll out new capabilities such as Corporate and Retail Internet Banking, SWIFT and RENTAS, Cash Recycling Machine/ATM, and trade finance. Concurrently, we grew the existing core business to ensure growth in financing as well as fee based income.”
Gross financing and loans trended upwards by 2.84 per cent from RM34.20 billion (FYE17) to RM35.17 billion (FYE18). The group’s total assets stood at RM45.42 billion, consistent with RM46.40 billion (3Q18) and RM44.81 billion (FYE17). Net Impaired Financing Ratio stood at 2.39 per cent.