by FARA AISYAH/ pic by ARIF KARTONO
BANK Kerjasama Rakyat Malaysia Bhd’s (Bank Rakyat) total assets for the financial year 2019 (FY19) were RM109.62 billion, RM2.73 billion or 2.6% year-on-year (YoY) higher compared to RM106.89 billion in the previous year.
CEO Datuk Rosman Mohamed (picture) said the assets growth is mainly contributed by financing and advances of 2.8% or RM1.96 billion to RM70.97 billion in the year.
He added that the bank’s return on assets (RoA) during the year remained healthy at 1.7%, well above the domestic banking industry’s RoA of 1.6%.
Meanwhile, Bank Rakyat’s profit before tax and zakat stood at RM1.79 billion in FY19, while the group’s net profit stood at RM1.15 billion.
“The steady performance was achieved through higher YoY net income by 3.26%, driven by the growth in core operating income and a lower YoY funding cost by 1.62% from the cut in the Overnight Policy Rate (OPR) in the second half of 2019, as well as ongoing initiatives on increasing current accounts and savings account (CASA),” Rosman said in his speech last week.
He also said the good performance was achieved via strong fundamentals and being focused on core activities despite the challenging environment.
The group continued to be the most profitable cooperative bank and the second-largest Islamic financial institution in Malaysia.
Bank Rakyat’s deposits stood at RM83.83 billion in 2019, compared to RM82.74 billion previously.
The CASA balances improved significantly at 15.1% or RM870 million to RM6.6 billion for the year, in tandem with the strategy to increase its CASA.
Bank Rakyat’s gross financing balance stood at RM72.42 billion in FY19, compared to RM70.4 billion previously.
The group noted that despite the intense competition, it continues to benefit from the diversification of portfolios, mainly from home, car and business financing.
Home financing rose 12.3% or RM730 million to RM6.65 billion, compared to RM5.92 billion previously. Car financing increased 11.2% or RM0.31 billion to RM3.08 billion, compared to RM2.77 billion previously.
Business financing, especially the cooperative segment, increased 9% or RM200 million to RM2.42 billion, compared to RM2.22 billion previously.
The financing loss coverage continues to remain high at 127.3% (2018: 115.8%), better than the domestic industry’s average of 89.6%.
Additionally, Bank Rakyat continues to monitor closely its assets quality with an improved gross impaired financing ratio, 1.93% from 2.12% previously.
Bank Rakyat has announced a 14% dividend with an estimated payout of RM406 million to all its members for FY19.
The group said it will continue to focus on internal alignment, particularly to explore the untapped potential within its businesses and operations in order to create long-term value to shareholders.