The rise in cost is expected as we have been developing and integrating our banking platform, says CEO
by NUR HAZIQAH A MALEK / pic by HUSSEIN SHAHARUDDIN
Malaysia Building Society Bhd’s (MBSB) net profit fell 73.5% to RM83.83 million for its first quarter ended March 31 this year (1Q19) against RM316.79 million registered in the same period a year ago.
MBSB said the lower net profit was due to higher expected credit losses and other operating expenses.
For its revenue, the group registered a 3.8% decline to RM784.04 million from RM815.04 million reported last year.
Group president and CEO Datuk Seri Ahmad Zaini Othman said the company is registering stable growths in revenue and net operating income, and maintained a cost-to-income ratio (CIR) of 26.3%.
“The rise in cost is expected as we have been developing and integrating our banking platform for the first few months of the year, enabling us to provide enhanced products and services, and stay competitive in the industry.
“However, we managed to keep our CIR below 30% and industry’s average,” he said in a statement yesterday.
In 1Q18, the company posted a CIR of 26.7%.
In terms of loans, its gross loans, financing and advances for 1Q19 increased by 0.7% year-on-year due to growth in corporate financing, which was compensated by personal financing decline.
Its personal financing remained the biggest contributor in the group, however, the portfolio’s growth balance was lower due to lower disbursements and decreasing portfolio base.
Its corporate loans and financing continued to grow with a disbursement of RM1.03 billion in the quarter, followed by a higher gross amount for property financing.
The group’s auto financing segment’s gross income was lower as the group focused on asset base growth for other portfolios.
On this year’s economic outlook, Ahmad Zaini expects it to remain challenging, but the bank will focus on expanding its banking capabilities. “With this, the bank’s technology transformation shall continue to be in the centre stage. On another front, we also aim at increasing our fee income-based activities to make up 35% of its income by the end of 2020,” he said.
At yesterday’s trading close, MBSB’s share price fell to 95 sen against the previous closing price of 97 sen.