No restructuring plan yet for BIMB

So far, we’re tracking our business plans and targets for the year, says Bank Islam acting CEO


DETAILs of a potential restructuring plan at BIMB Holdings Bhd are still unclear as its board and major shareholder have yet to decide on the matter.

Bank Islam Malaysia Bhd — a wholly owned banking unit of BIMB — acting CEO Mohd Muazzam Mohamed said there is no concrete plan currently being considered by the board of directors.

“This is a matter of discussion and decision at our shareholder level. At the bank level, we are not aware of any concrete plan as yet,” he said at a briefing on BIMB’s latest financial results in Kuala Lumpur yesterday.

He added that the group has yet to make any decision on appointing a CEO for the group.

“At the BIMB group level, there is no acting CEO — it is run by a board committee. At the bank level, I serve as the acting CEO. For now, I’m given a mandate to run the bank on a business- as-usual basis. So far, we’re tracking our business plans and targets for the year,” he said.

It has been reported that BIMB may undergo a restructuring plan, which could include Bank Islam taking over the financial holding status of the company.

However, these plans could be delayed due to recent major changes at both the group and its major shareholder, Lembaga Tabung Haji (TH), which owns a 53.47%- stake in BIMB.

Former BIMB CEO Khairul Kamarudin resigned on July 20 — less than a year after taking office, citing personal reasons.

Khairul, who had been appointed to the position on Aug 7, 2017, also concurrently relinquished his post as CEO of Bank Islam.

Mohd Muazzam was then appointed as acting CEO of Bank Islam, after having served as its CFO since May 2015.

At TH, former Securities Commission Malaysia executive chairman Tan Sri Mohammed Nor Md Yusof was appointed as its new chairperson in July, replacing Umno Supreme Council member Datuk Seri Abdul Azeez Abdul Rahim, who vacated his position five days after the Barisan Nasionalled government was ousted in the 14th General Election.

The pilgrim fund board also named former BIMB CEO Datuk Seri Zukri Samat as its new CEO.

Meanwhile, Bank Islam has allocated around RM300 million to ramp up its digital infrastructure, as banks continue to incorporate financial technology in line with global technological advancements.

Mohd Muazzam said the threeyear technology roadmap for the bank will run from 2018 to 2020. With these digitalisation efforts, the bank is expecting to see doubledigit growth in its online banking user base, which presently stands at around 500,000.

BIMB’s net profit rose 10.5% to RM149.91 million in the second quarter ended June 30, 2018, from RM135.67 million last year on higher contribution from the Islamic banking and takaful businesses.

Quarterly revenue climbed 5.2% to RM992.17 million from RM943.19 million registered a year ago.

For the half year, the group’s net profit grew 12.3% year-on-year (YoY) to RM322.05 million, while revenue was 6.9% higher YoY at RM1.99 billion.

Annualised return on equity stood at 14.1% for the period, while cost-to-income ratio improved to 51.6% as at end-June 2018 from 57% as at end-2017.

At Bank Islam, profit after zakat and taxation increased 7.9% YoY to RM285.9 million for the first half of 2018 (1H18) — mainly due to higher income resulting from the higher base rate and base financing rate effective February 2018, as well as a 6.7% growth in net financing to RM43.2 billion as at end-June 2018. The bank’s revenue also rose 5.7% YoY to RM1.58 billion in 1H18.

Mohd Muazzam said the bank aims to sustain the 1H18 profitability for the rest of the year on sustained consumer spending, while net financing growth is expected to be maintained at around 8% for 2018, similar to last year’s growth of 8%.

Syarikat Takaful Malaysia Bhd, also a major contributor to BIMB’s earnings, grew profit before zakat and taxation by 11.2% YoY to RM146.4 million in 1H18 on higher net wakalah fee income arising from business growth in the family and general takaful business, partially offset by fair value losses.

Its operating revenue jumped 12.5% YoY to RM1.29 billion for 1H18 on higher sales generated by both the family takaful and general takaful businesses.