Revenue for the quarter decreased on the back of lower income from financing activities
By FARA AISYAH / Pic By ISMAIL CHE RUS
MBSB Bank Bhd’s net profit for the second quarter ended June 30, 2018 (2Q18), dipped 5.92% to RM85.69 million from RM91.08 million recorded in the previous year’s corresponding period due to lower gross loans and financing.
In an exchange filing to Bursa Malaysia, MBSB Bank said the group’s gross loans and financing for 2Q18 declined by 1.2% compared to 2Q17 — as a result of its proposed sale of personal financing, property financing and mortgage in 4Q18 which amounted to RM1.51 billion.
“The decline was offset by the increase in corporate loans and financing, and increased the corporate retail mix to 25:75 from 2Q17 of 21:79.
“The increase was also due to consolidation of the existing portfolio of MBSB Bank,” the statement read.
The company added that the gross income from personal financing in the current period was lower compared to the previous year’s corresponding period due to lower disbursements and a decreasing portfolio base.
The gross income from corporate loans and financing in the current period was higher compared to 2Q17 due to the continued growth of corporate loans and financing assets base.
Corporate disbursements amounted to RM1.4 billion in 2Q18, representing 80.9% of the total quarter disbursement of RM1.7 billion.
In addition, the gross income from property financing was higher in the current period com- pared to the previous corresponding period due to growth in its financing assets base.
It was partly set off by lower income from mortgage loans as its assets base decreased following conversion efforts from conventional mortgage to Islamic property financing.
However, the gross income from auto financing in 2Q18 was lower compared to the previous year’s corresponding period due to a decreasing portfolio base.
Group president and CEO Datuk Seri Ahmad Zaini Othman (picture) said the company is certainly encouraged with these achievements.
“I am also pleased to share that we had vested all Shariah- compliant assets and liabilities to MBSB Bank on April 2, 2018, leaving behind the conventional loans and deposits at Malaysia Building Society Bhd (MBSB).
“Apart from the corporate segment, the consolidation of existing portfolios from MBSB Bank also contributed to the group moving dynamically towards its targeted asset com- position of 65:35 by the year 2019,” he said in a statement yesterday.
The revenue for the quarter decreased marginally to RM794.14 million against RM813.42 million posted in April-June 2017, on the back of lower income from financing activities due to cessation of conventional businesses since 1Q18.
For the remaining year, Ahmad Zaini said MBSB Bank will continue to expand its new banking products, which include trade finance and wealth management, while achieving required capabilities such as Internet and mobile banking to increase its customer reach.