by FARA AISYAH/ graphic by MZUKRI

BIMB Holdings Bhd’s earnings in the second quarter ended June 30, 2020 (2Q20), fell 21.59% year-on-year (YoY) to RM153.03 million due to the multiple Overnight Policy Rate (OPR) reductions and extension of the loan moratorium.

Earnings for the six months eased by 8.9% YoY or RM35.4 million to RM362.3 million as the rate cuts hit the group’s wholly owned subsidiary Bank Islam Malaysia Bhd’s total net income by RM56.1 million or 10.8% despite a 12.1% YoY growth in gross financing.

The bank recognised a modification loss of RM97.8 million due to payment moratorium.

BIMB’s earnings per share for the three months were lower at 8.54 sen compared to 11.06 sen in 2Q19.

Quarterly revenue declined by 1% YoY to RM1.14 billion, while for the six months, it rose by 2% YoY to RM2.39 billion.

At the bank level, Bank Islam’s profit before zakat and tax (PBZT) tumbled 11.1% YoY to RM389 million in the first half of the year (1H20) from RM437.4 million last year, due to lower net financing income arising from multiple OPR cuts and recognition of modification loss due to the moratorium.

Non-fund-based income increased by RM74.4 million for the six months due to higher investment income.

The bank’s total assets stood at RM68.6 billion in 1H20 compared to RM64.2 billion as at June 30, 2019, due to the increase in net financing by RM5.6 billion.

At end-June 2020, customer deposits and investment accounts stood at RM58.5 billion, up 6.8% YoY.

Its takaful business, Syarikat Takaful Malaysia Keluarga Bhd, recorded PBZT of RM211.8 million in the period versus RM210.4 million last year.

The subsidiary posted an operating revenue of RM1.43 billion in 1H20 versus RM1.59 billion in the same period last year, attributable to lower sales generated from the family takaful business.

The lower sales were due to credit-related and group medical products as the business activities have been impacted by the Movement Control Order (MCO) and Conditional MCO (CMCO) arising from the Covid-19 pandemic.

The general takaful business generated gross earned contributions of RM364.8 million in 1H20 against RM370.4 million in the January to June 2019 period, mainly attributable to fire class as business activities have been impacted by the MCO and CMCO.

BIMB stated that sentiments remain driven by lingering uncertainties and volatility as the path to recovery is unlikely to be a clear cut for the banking industry.