MBSB eyes marginal 3% to 4% revenue growth this year

KUALA LUMPUR (June 17): Malaysia Building Society Bhd (MBSB) expects to increase its revenue by 3% to 4% this year, driven by fee income and trade financing expansion.

“As far as revenue is concerned, we are trying to push on more revenue streams. We were hit by the pandemic in 2020 because most of our plans then were to create more revenue streams at the top level, as well as our income stream, but these were somewhat hampered.

“But nevertheless, our push for certain fee-based income and trade finance is still on the cards, and we feel that in terms of growth [in the top line], we should be able to get about 3% to 4%, and for profitability to be at least sustained, or perhaps improved, from our 2020 position. But that again depends on the economic conditions of the country,” MBSB president and chief executive officer (CEO) Datuk Seri Ahmad Zaini Othman told a press briefing after MBSB’s annual general meeting (AGM) today.  

In tandem with the top line growth projection, Ahmad Zaini targets a 3% loan growth this year.

MBSB reported a first-quarter net profit of RM63.41 million for the three months ended March 31, 2021 (1QFY21), versus a net loss of RM73.25 million a year earlier, as the financial services provider registered lower funding cost and net allowances for impaired loans. Revenue, however, fell to RM680.98 million from RM741.41 million.

For the financial year ended Dec 31, 2020 (FY20), the group’s annual net profit declined 62% to RM269.32 million from RM716.9 million despite a 4.43% uptick in revenue to RM3.15 billion from RM3.01 billion on a higher gain on sale of financial investments. The weaker annual earnings were attributed to higher impairment losses and modification losses as a result of the financing moratorium granted to customers last year.

The group incurred a modification loss of RM504.75 million due to a blanket automatic moratorium granted by the government.

In terms of modification loss, Ahmad Zaini expects it to be much lower this year, compared to the previous year, due to the implementation of more targeted assistance for those in need.

Meanwhile, Ahmad Zaini said the bank would shy away from accepting loans for the tourism and airlines industry to safeguard its asset quality.

“Looking at how we onboard new businesses or new financing on [our] loan books, I think part of a big strategy in terms of ensuring quality assets is being observed; selectively also we will avoid the tourism industry, airlines and so on. So, we are enhancing further in terms of how we look at the onboarding of customers, especially corporate customers,” he said.

“We are also increasingly looking at the right segmentation. From our experience over the last one year since 2020, we do know that certain segments like the retail segment are something that we need to be more cautious about, where things can be initiated by authorities and then we would basically suffer losses,” he added.

Nevertheless, he pointed out that the personal financial segment for government servants is the growth spot for the company to pursue going forward due to job stability.

At 4.13pm, MBSB's share price was down half a sen at 62 sen, giving the group a market capitalisation of RM4.36 billion, with 4.17 million shares traded.

Get the latest news @ www.EdgeProp.my

Subscribe to our Telegram channel for the latest stories and updates 

Click here for more property stories