MBSB 2Q net profit up 45% on higher income, investment activities

KUALA LUMPUR (Aug 22): Malaysia Building Society Bhd's (MBSB) net profit climbed 44.6% to RM91.08 million in the second quarter ended June 30, 2017 (2QFY17) from RM63.01 million a year ago, on higher income from net financing/loans, investment activities and lower cost of funds.

Earnings per share fell to 1.57 sen in 2QFY17 from 2.21 sen in 2QFY16 due to increase in number of shares with the exercise of its employee share option scheme and warrants.

Quarterly revenue grew by a marginal 0.1% to RM813.42 million from RM812.52 million.

For the cumulative six months (1HFY17), the group's net profit increased 96.6% to RM192.41 million from RM97.84 million a year ago, mainly due to higher net operating income and lower allowances for impairment losses on loans, advances and financing.

Revenue, however, slipped to RM1.62 billion in 1HFY17 from RM1.63 billion in 1HFY16.

In a statement yesterday, MBSB said the group's gross loans and financing recorded a growth of 2.19% to RM36.06 billion in 1HFY17, mainly contributed by higher corporate financing disbursements but partly set off by a slight contraction in the retail base.

Annualised return on equity stood at 5.7%, while annualised return on assets stood at 0.87%.

"Corporate segment's strategic business expansions had increased the asset composition between retail and corporate to 79:21 compared with 81:19 as at Dec 31, 2016, progressing towards the group's target of 70:30 by 2019," it added.

MBSB said total assets recorded a 3.72% increase to RM44.88 billion as at June 30, 2017, mainly due to higher gross financing/loans and liquefiable assets.

It also noted that total deposits from customers increased by 5.58% to stand at RM32.32 billion as at June 30, 2017.

MBSB's liquid asset position as at 2QFY17 increased by 11.45% to RM10.5 billion compared with 4QFY16.

"Financing/loan loss coverage remains consistent at 113.14% from 113.3% on a quarter-on-quarter basis with a reduction of 0.16 percentage points. The group's leverage ratio remains strong at 14.06%," it added.

MBSB president and chief executive officer Datuk Seri Ahmad Zaini Othman said the group will develop special programmes for equipment financing, seek more effective approaches to increase the generation of fee income via wealth management, as well as corporate advisory services.

On the group receiving Bank Negara Malaysia's green light to acquire the entire interest in Asian Finance Bank Bhd last Friday, he said: "This is positive news much welcomed by all stakeholders especially the shareholders and the workforce at MBSB."

"Prior to this, we have actually established key plans and activities to ensure a smooth integration process, so now it's the time to get the ball rolling," he added.

MBSB shares closed up two sen or 1.57% at RM1.29 yesterday, for a market capitalisation of RM7.64 billion. — theedgemarkets.com

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