MBSB eyes 3% revenue growth this year

The group is pushing further the consumer retail segment, which has provided a stable income to its banking arm

by BERNAMA / Pic by TMR FILE PIX

MALAYSIA Building Society Bhd (MBSB) has projected a 3% growth in revenue this year as the group strives to generate more revenue streams to achieve the target.

President and CEO Datuk Seri Ahmad Zaini Othman (picture) said: “What we want to do is to grow our income. But at the end of the day, we want to look at the net income level of the group. MBSB wants to maintain its profitability trajectory this year.”

He was speaking to reporters in conjunction with the company’s 51st AGM held virtually yesterday.

In the financial year 2020 (FY20), the company’s net profit dropped sharply by more than 62% to RM269.32 million from RM716.9 million in FY19.

However, revenue rose 4.4% to RM3.15 billion from RM3.01 billion, mainly due to higher gains on sales of financial investments of RM249.6 million compared to RM60.02 million previously.

Ahmad Zaini said MBSB is expected to record a 3% loan growth this year, depending on Malaysia’s economic performance. The group is also pushing further the consumer retail segment, which has provided a stable income to its banking arm.

“The personal financing to government servants provides greater stability to us because there is no retrenchment on the table,” he noted.

On non-performing loans, Ahmad Zaini said the rate has gone up slightly during the Movement Control Order 3.0 (MCO 3.0) compared to MCO 1.0, but is still manageable, adding that MBSB is offering a targeted approach to assist customers in need.

MBSB was hit by a substantial modification loss of RM504.75 million in FY20 due to the blanket automatic moratorium granted by the government.

The modification loss has been more manageable now due to the implementation of more targeted assistance.

Nonetheless, he said MBSB will continue to provide assistance to customers based on their financial situations.

The group has also set a target to be a regional player in trade finance as part of its Journey 25 aspiration, when it aims to become a fully matured Islamic financial institution by 2025.

It is also currently considering various forms of corporate exercise in order to benefit from greater access to funding and investments which can strengthen its capital position.

“We forecast our trade finance business to continue thriving and total deposits to increase further in the second quarter (2Q) of this year following a growth of 5.12% in the 1Q,” Ahmad Zaini added. — Bernama