MBSB’s 4Q earnings fall 4.9% to RM118m


Malaysia Building Society Bhd’s (MBSB) net profit for its fourth quarter (4Q) ended Dec 31, 2018, fell 4.86% year-on-year (YoY) to RM117.95 million due to impairment allowances on loans and financing.

For the full year, MBSB’s net profit jumped 54% YoY to RM642.4 million, while revenue fell 3% YoY to RM3.15 billion.

“The lower charge was mainly due to the improvement of staging from the corporate portfolio for both stage 1 and stage 2 under the Malaysian Financial Reporting Standard 9, as well as 2017’s higher impairment following the programme. The higher operating expenses were due to integration costs,” MBSB said in a filing to Bursa Malaysia yesterday.

Revenue for the last three months of 2018 fell 8.3% YoY to RM750.35 million.

Its cost-to-income ratio (CIR) rose to 29.53% in 2018 from 19.56% in the previous year, on higher operating costs from investments in information technology infrastructure and distribution channels.

“MBSB’s CIR still remains well below the industry’s average of 50.1%,” the lender stated.

Its gross loans and financing increased by 2.84% to RM35.17 billion in 2018 mainly due to the proposed sale of personal financing, property financing and mortgages amounting to RM1.51 billion.

Its total assets grew 1.36% to RM45.42 billion from RM44.81 billion as at end-2017.

MBSB group president and CEO Datuk Seri Ahmad Zaini Othman said the group’s financial performance was within expectations — in line with the group’s strategy of wanting to grow its banking infrastructure, along with the core business.

“Also, 95% of 2018’s income was derived from the existing lines of business, and the remaining 5% from new offerings,” Ahmad Zaini said.

“This was within our expectations as we had focused our time and resources significantly on building the banking infrastructure to enable us to roll out new capabilities.

“Concurrently, we are growing the existing core business to ensure growth in financing, as well as fee-based income,” he added.

Moving forward, Ahmad Zaini said the group will continue to adopt technology to expand its market reach, particularly to the small and medium enterprise (SME) market.

“We are cognisant of the challenges — economic and other factors — this year, but we shall keep to the technology transformation plans as these are key to ensuring our ability to compete in the industry.

“With new capabilities and channels, we shall be able to extend our market reach, especially in the SME segment, through products such as trade finance.

“Greater emphasis shall also be placed on fee income to be contributed from the retail segment,” Ahmad Zaini said.