MBSB’s earnings triple on write back in impairment losses

PETALING JAYA: Malaysia Building Society Bhd’s (MBSB) net profit for the first quarter ended March 31, 2018 tripled to RM316.79 million from RM101.32 million a year ago partly due to the write back of RM154 million in impairment losses of financing assets.

MBSB group president and CEO Datuk Seri Ahmad Zaini Othman said the marked improvement is within its expectations following the completion of the impairment programme in the last quarter of 2017.

“This follows the implementation of MFRS 9 effective Jan 1 this year, hence indicating that we had actually undertaken a highly prudent impairment programme,” he said in a statement.

Revenue rose marginally to RM815.04 million compared with RM811.2 million in the previous year’s corresponding quarter.

MBSB’s gross loans and financing grew 2.93% quarter-on-quarter by RM1 billion to RM35.2 billion, largely contributed by corporate and property financing. Its net impaired financing/loans ratio further improved to 1.82% from 2.11% (Q4’17) and 2.76% (Q1’17) resulting from the reduction in the net impaired financing loans together with the write back of the allowances on the financial assets’ impairment.

The group’s cost-to-income ratio (CIR) regressed to 26.71% from 19.72% (Q1’17), but the rise in costs had been expected due to the merger exercise as well as due to higher funding costs. Its CIR remains considerably better than the industry’s average of 49.7%.

MBSB completed its acquisition of MBSB Bank Bhd, formerly known as Asian Finance Bank Bhd on Feb 7, 2018, making MBSB a financial holding company.