BIMB Holdings’ Q3 net profit falls to RM135.8 mln

Estimate Reading Time: 3 minutes

KUALA LUMPUR, Nov 30 — Bank Islam’s parent company BIMB Holdings Bhd (BHB) reported a net profit of RM135.81 million for the third quarter ended Sept 30, 2020, a 35 per cent drop from RM208.38 million in the same quarter last year.

-Advertisement-

Revenue slipped to RM1.33 billion from RM1.38 billion a year ago, the company said in a filing with Bursa Malaysia today.

The Islamic investment holding company’s performance was mainly dependent on its two main operating subsidiaries, namely Bank Islam Malaysia Bhd and Syarikat Takaful Malaysia Keluarga Bhd (Takaful Malaysia).

Bank Islam’s profit before zakat and taxation (PBZT) shrank 34 per cent year-on-year (y-o-y) to RM137.3 million while Takaful Malaysia’s PBZT contracted 20 per cent to RM97.8 million.

For the first nine months, BHD’s net profit fell 18 per cent to RM498.07 million on the back of an eight per cent lower revenue of RM3.72 billion.

In a media statement, BHB said the weaker nine-month performance was due to lower net financing income arising from multiple downward revisions of Bank Negara Malaysia’s Overnight Policy Rate, the recognition of modification losses due to the loan moratorium exercise in April, and preemptive impairment provision in consideration of the challenging economic environment.

However, the group noted its annualised after-tax return on equity remained healthy at 11.7 per cent with earnings per share valued at 27.82 sen, while group net assets per share improved to RM3.64 as of Sept 30, 2020, compared to RM3.34 on Dec 31, 2019.

For its banking segment, BHB said Bank Islam’s assets portfolio quality remained strong as reflected in the low gross impaired financing ratio of 0.6 per cent at Sept 30, lower than the 1.4 per cent of the overall banking system during the period.

The bank’s total gross impaired financing at Sept 30 was RM328.9 million compared to RM541.4 million for the same period last year, the group said.

BHB said the bank’s total capital ratio of 18.8 per cent during the period under review was also in a strong capital position to facilitate targeted assistance to affected customers and support business growth.

-Advertisement-

“As of Sept 30, the bank’s net financing reached RM53.8 billion, a healthy 11.7 per cent y-o-y growth of RM5.6 billion.

“Customer deposits and investment accounts rose 5.2 per cent or RM2.9 billion y-o-y to RM58.9 billion while total current account savings account and transactional investment accounts composition was at a healthy level of 37.3 per cent of total customer deposits and investment accounts,” it said.

The group highlighted that the banking Industry’s financing growth was higher at 4.4 per cent y-o-y in September 2020, mainly from the household sector which increased by 5.2 per cent.

At this juncture, Bank Islam had been persevering in producing sustainable financial results that were within the industry’s average, cognisant of and leveraging on the low-interest-rate environment, the group said.

Moving forward, the group said the bank would maintain its prudent stand with regards to the market outlook and a preemptive impairment provision in the form of management overlay has been made in consideration of the challenging economic environment.

As for Takaful Malaysia, the group said the decreased performance was mainly attributable to lower sales generated from the family takaful business. It recorded gross earned contributions of RM1.26 billion for the nine-month period compared to RM1.51 billion in the corresponding period last year.

On the other hand, its general takaful business chalked up higher gross earned contributions of RM556.4 million for the period, compared to RM542.4 million in the corresponding period in 2019, mainly attributable to the motor class.

The group noted that due to the COVID-19 pandemic and related economic impacts, Takaful Malaysia was preparing for a very different market and operating landscape post-Recovery Movement Control Order period as concerns on job security remained heightened.

The group said that consumers were expected to be more cautious in their spending and this was expected as economic activities would take some time to recover.

“To sustain its market-leading position supporting business growth and customer-centricity, the group will continue its innovative strategies through the implementation of digital strategy online solutions and digital ecosystem.

“Takaful Malaysia will continue to expand its distribution capabilities, strategic partnerships with leading Islamic banks and brand awareness initiatives,” it added. – BERNAMA

Share this Article
  • 1
  •  
  •  
  •  
  •  
  •  
  •  
    1
    Share