Strong Islamic segment growth boosts MBSB’S first quarter results
KUCHING: Malaysia Building Society Bhd ( MBSB) has had a good start to the year with above expectation earnings of RM166 million recorded for the first quarter of the financial year 2013 ( 1QFY13).
The net profit, which doubled, accounted for 32 per cent of the consensus estimates, contributed mainly by strong growth in its Islamic banking operations, lower allowance for impairment losses, advances and financing due to a writeback.
The gross income from personal financing improved due to the growth of the personal financing portfolio; net loans grew 51 per cent to RM27 billion while non- performing loans stood at 3.4 per cent as at endMarch 2013.
The research arm of Kenanga Investment Bank Bhd ( Kenanga Research) stated, “The group is planning to address its relatively low core capital ratio, which may include the securitisation of loans, issuance of debts and also possible capital raising exercises.
“This will be announced once its plans are finalised and approved by the board,” it noted while leaving its FY13 and FY14 forecast numbers unchanged.
Meanwhile, the research wing of MIDF Amanah Investment Bank Bhd ( MIDF Research) observed that net interest margin ( NIM) declined 27 basis points ( bps) quarter on quarter( q- o- q) to 4.65 per cent in 1QFY13.
“We believe that the drop in NIM was contributed by its strong growth in deposits of 15.3 per cent q- o- q ( 61.3 per cent annualised) to RM24.8 billion.
“Liquidity level rose as the group launched retail FD ( fixed deposit) campaign ( Fantastic 4 and Fantastic Returns with attractive rates of 4.75 per cent).
“We have adjusted our cost to income ratio lower from 26 per cent to 23 per cent for both FY13 and FY14 as well as raise our loan growth assumption for FY13 from 15 to 20 per cent.
“Also, we have tweaked our assumption for credit cost slightly lower for FY13 and FY14,” MIDF Research said as it left the target price for the stock unchanged at RM2.50 per share.
Meanwhile, Kenanga Research stated that at the current price, the stock offered a total return of 26 per cent, as it raised the target price 70 sent to RM3.40 per share.