MBSB 3Q improves on lower impairments

By KEVIN WONG / Pic By HUSSEIN SHAHARUDDIN

Malaysia Building Society Bhd (MBSB) noted that lower allowance for impairment losses on financing/loans and advances, and lower cost of funds have enabled the finance firm to post a net profit of RM100.74 million for the third quarter this year (3Q17), almost double the RM57 million made in 3Q16.

Revenue for the period amounted to RM816.87 million, a slight reduct ion from RM830.25 million made in 3Q16. Earnings per share (EPS) for 3Q17 was 1.7 sen.

“We shall complete the impairment programme by the end of this year, as targeted.

“We continue to advance towards 70:30 asset composition between retail and corporate, with September position showing 78:22. Meanwhile, close to 90% of our asset portfolios are Islamic,” MBSB president and CEO Datuk Seri Ahmad Zaini Othman noted in a release yesterday.

He added that the lender utilised substantial time and efforts to ensure the negotiation of the proposed takeover and merger with the Asian Finance Bank Bhd (AFB), which would be favourable to both parties.

“We expect to conclude the share purchase agreement with the shareholders of AFB sometime in 1Q18, and that shall then mark a new beginning for MBSB,” Ahmad Zaini said.

MBSB will buy AFB for RM645 million in a cash and equity deal, after which the finance company will have a banking licence.

For the first nine months, MBSB’s net profit amounted to RM293 million, or five sen EPS on RM2.44 billion in revenue.

Gross financing/loans and advances stood at RM36.09 billion at the end of September, while total assets stood at RM44.95 billion, up 2.27% and 3.89% respectively year-to-date.

MBSB noted that the upward trend in gross financing/loans and advances was mainly due to the expansion in corporate and property financing, which has helped to partly offset the contraction in its retail segment.

Customer deposits rose 8.27% year-on-year in the 3Q to RM33.14 billion, supported by corporate and institutional client deposits.

Net return on average equity was 5.69% versus 3.59% in 3Q16 and 5.65% in 2Q17. Net return on average assets stood at 0.89% in 3Q17, while cost-to-income ratio was 21.93%, down from 22.8% in 3Q16.

MBSB share price closed at RM1.09 at the end of trading yesterday.