MBSB’s Q3 profit drops 8.8% on higher im­pair­ments

The Sun (Malaysia) - - SUNBIZ -

PETALING JAYA: Malaysia Build­ing So­ci­ety Bhd (MBSB) saw its net profit fall 8.8% to RM57.93 mil­lion for the third quar­ter ended Sept 30, 2016 from RM63.53 mil­lion in the pre­vi­ous cor­re­spond­ing pe­riod, mainly due to higher al­lowance for im­pair­ment losses on loans, ad­vances and fi­nanc­ing. Rev­enue, how­ever, ex­panded 8.1% to RM830.25 mil­lion from RM768.03 mil­lion.

In a fil­ing with the stock ex­change, MBSB said gross fi­nanc­ing and loans grew 1.64% to RM35.37 bil­lion in Q3 from RM34.80 bil­lion in Q2.

As­set-qual­ity wise, its net im­paired fi­nanc­ing ra­tio stood at 2.91% as at Sept 30, 2016, against 3.29% in Q2.

In view of the in­creas­ing mar­ket un­cer­tain­ties, MBSB pres­i­dent and CEO Datuk Ah­mad Zaini Oth­man ( pix) said, the group will con­tinue to be cau­tious in eval­u­at­ing its busi­ness ini­tia­tives to en­sure that it can sus­tain the prof­itabil­ity level and main­tain as­set qual­ity.

“Due to these rea­sons, we have in the past year se­cured fi­nanc­ing of the af­ford­able hous­ing projects un­der the 1Malaysia Civil Ser­vants Hous­ing Pro­gramme and 1Malaysia Peo­ple’s Hous­ing Pro­gramme,” he ex­plained.

MBSB opined that the op­er­at­ing en­vi­ron­ment for the rest of 2016 will be chal­leng­ing. How­ever, it said the cor­po­rate busi­ness seg­ment con­tin­ues to show pos­i­tive con­tri­bu­tion, in terms of growth in cor­po­rate port­fo­lio as­sets and earn­ings.

The group will also con­tinue to strengthen, adapt and sus­tain its cor­po­rate and re­tail busi­ness ac­tiv­i­ties in­clud­ing col­lec­tion ef­forts to com­pete in the chal­leng­ing en­vi­ron­ment.

“These ac­tiv­i­ties in­clude con­tin­ued im­prove­ment in com­pli­ant op­er­a­tional work­flows, en­hanc­ing as­sets qual­ity based on risk man­age­ment and credit frame­works. Bar­ring any un­fore­seen cir­cum­stances, the group ex­pects its per­for­mance for 2016 to re­main sat­is­fac­tory,” it said.

MSBS’s nine-month net profit de­clined 43% to RM155.77 mil­lion from RM273.4 mil­lion on the back of a 10.4% rise in rev­enue to RM2.46 bil­lion from RM2.22 bil­lion.

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