MBSB’s Q3 profit drops 8.8% on higher impairments

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.