MBSB results improve on higher loans, lower cost of funds

PETALING JAYA: Malaysia Building Society Bhd’s (MBSB) net profit for the first quarter ended March 31, 2017 rose almost threefold to RM101.32 million from RM34.84 million a year ago due to higher gross loans and lower cost of funds.

Revenue dipped by 0.2% to RM811.20 million from RM812.63 million in the previous year’s corresponding period mainly due to lower financing income from the retail segment and lower income from investments in liquid assets.

President and CEO Datuk Seri Ahmad Zaini Othman said the group’s gross loans and financing grew 4.07% year-on-year to RM35.85 billion mainly contributed by higher corporate financing disbursements but partly set off by a slight contraction in the retail base.

Corporate business’ strategic (business) expansions in the sector had increased its asset composition between retail and corporate to 80:20 compared to 84:16 year-on-year, steadily progressing towards the group’s target of 70:30.

Return on equity stood at 5.98% while return on assets grew to 0.92%. Asset quality has improved with net impaired financing/loans ratio strengthening to 2.76%.

MBSB continued to preserve a costefficient entity with an industry leading cost to income ratio of 19.72%, an improvement from 22.15% year-on-year and considerably better than the industry’s average of 49.5%.

“We shall continue to strengthen our market position in financing government contracts and projects especially in the affordable housing segment as well as the SME, which has shown continued resilience,” said Zaini.

Commenting on the proposed merger with Asian Finance Bank, he said MBSB is at the final stage of negotiations with shareholders and hopes to finalise it within the timeline set by Bank Negara Malaysia.