Tuesday November 6, 2012
MBSB profit goal on track
By THOMAS HUONG
2012 is going to be another good year in terms of targets, says CEO
KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) is on track to achieve its target of RM600mil in profit before tax (PBT) this year, said president and chief executive officer Datuk Ahmad Zaini Othman.
“If you look at the trend of the business momentum that we have seen over the last nine months, we do not foresee any problems in achieving our target,” Zaini told a media briefing in Kuala Lumpur.
MBSB posted a 25.5% year-on-year growth in PBT to RM410.5mil for the nine months ended Sept 30.
“We feel that the personal financing segment is still big enough for us to grow. On the other segments of the business like mortgage, we continue to grow progressively. Overall, 2012 is going to be another good year for us in terms of targets,” he said.
For the third quarter ended Sept 30, MBSB posted a 5.4% year-on-year drop in net profit to RM90mil.
It noted that it had taken into account an under-provision for taxation in the previous year, which amounted to RM22.28mil.
Revenue rose 53.1% year-on-year to RM520.7mil for the third quarter.
MBSB chief financial officer Tang Yow Sai said: “Without this under-provision, our after-tax earnings would have grown 18% compared with the last corresponding quarter.”
Tang said MBSB had performed a more prudent computation of tax, and “added back a collective assessment allowance which normally the banks, under the Banking and Financial Institutions Act 1989, are allowed to do.”
However, MBSB is a exempt finance company.
“So, we had applied in 2010 to the Ministry of Finance (MOF) and the Inland Revenue Board (IRB) to request to be exempted (to be able to get this impairment to be deducted from tax computation).
“We are still waiting for the decision from the MoF and IRB. If we do get the approval, you should see a big write-back on tax,” said Tang.
For the nine months ended Sept 30, MBSB's net profit increased 8.9% year-on-year to RM263mil while revenue rose 45.7% to RM1.344bil.
The group told Bursa Malaysia that the better performance was was mainly due to higher income from Islamic banking operations via the expansion of personal financing and higher net interest income from conventional business.
In a statement, Zaini said MBSB's third-quarter performance was at a record level.
“It is mostly attributed to our Islamic banking operations across MBSB's retail segment, especially with the offer of personal financing-i competitive packages to government servants.
“This consumer segment remains a stable market with low repayment risks, which justifies the provision of affordable financing to them,” he said.
Zaini also pointed out that the group's non-performing loan ratio stood at 4.33% as at Sept 30, from 8.82% at Dec 31, 2011.
“This was partly contributed by our pursuit to resolve our corporate legacy accounts,” he said.
Net loan, advances and financing stood at RM23.2bil as at Sept 30, an increase of 52.6% versus RM15.2bil at Dec 31, 2011, while deposits stood at RM20bil, a growth of 48% compared with RM13.5bil previously.
MBSB is targeting to launch its new core banking system, known as MBSB Integrated Core Banking System, by end of this month.