MBSB earnings up 27.3% on lower expected credit losses and opex

• Commenting on the results, MBSB group chief executive officer Datuk Nor Azam M Taib said, “The improvement is driven by strong fundamentals based on our business plan despite the challenging economic environment.”

KUALA LUMPUR (May 25): Malaysia Building Society Bhd (MBSB) saw its net profit increase by 27.3% to RM74.13 million or 1.03 sen per share in the first quarter ended March 31, 2023 (1QFY23), from RM58.21 million or 0.81 sen per share a year ago, mainly due to lower expected credit losses and lower operating expenditure.

Quarterly revenue rose marginally to RM665.49 million from RM664.55 million.

In a filing to Bursa Malaysia, the group said total assets stood at RM55.3 billion compared with RM54.9 billion in 4QFY2022, mainly driven by a net financing growth of RM600 million and financial investments by RM300 million, which was then netted off by a decrease in the cash and short-term portfolio by RM600 million. 

Additionaly, total deposit showed an increase of RM1.4 billion or 3.8% as compared to 4QFY2022, it added.

Commenting on the results, MBSB group chief executive officer Datuk Nor Azam M Taib said, “The improvement is driven by strong fundamentals based on our business plan despite the challenging economic environment.”

He said the campaigns and promotions conducted for financing and deposits throughout the quarter resulted in steady growth, as evidenced from the increase in the group’s gross loan and financing by 1.6% or RM0.6 billion and RM1.2 billion in the customer deposit segment.

Notably, the group’s return on equity (ROE) stood at 3.39%, and return on assets (ROA) at 0.54%, during the quarter under review. 

MBSB maintained a healthy capital and liquidity positions with tier-1 capital equity at 19.50% and total capital ratio at 23.77%. 

The group’s gross impaired financing ratio stood at 6.98%, marginally higher by 0.22% compared with 4QFY2022. 

“With the resolution and settlement of a few impaired corporate accounts by the end of this year, we expect the ratio to improve in the coming quarters,” said the group.

The group’s main subsidiary, MBSB Bank, reported an increase in gross financing by RM592 million, due to growth in property and commercial banking. 

Customer deposits increased by RM1,150 million for the quarter, contributed mainly by retail term deposit and current account and savings account (CASA). 

MBSB said moving forward it will focus more on strengthening its core retail segment while targeting a wider group of premium corporates to facilitate financing growth. 

“In achieving our goals, we are taking various initiatives which include improving our cost of funds via increasing of CASA deposits to remain competitive in terms of pricing. We will continue to drive the growth in financing through relationship-based partnership and providing innovative and personalised services,” it added.