MBSB 4Q earnings soar to RM83.8m on Islamic banking, lower tax

KUALA LUMPUR (Feb 2): Malaysia Building Society Bhd (MBSB) posted a stellar set of earnings in the fourth quarter ended Dec 31, 2011, with net profit up 554% to RM83.82 million from RM12.81 million a year ago.

Its earnings were boosted mainly by higher net income from Islamic banking operations via the expansion of personal financing and also lower taxation. Net income from Islamic banking operations was RM113.17 million compared with RM52.92 million a year ago.

However, MBSB accorded higher allowance for impairment losses on loans, advances and financing at RM46.82 million compared with RM8.64 million a year ago.

Profit before taxation and zakat was RM101.19 million compared with RM72.43 million. Its taxation was RM17.37 million compared with RM59.62 million a year ago.

Revenue rose 66.1% to RM347.14 million from RM208.91 million while earnings per share were 8.35 sen compared with 1.83 sen. The board recommended a final dividend of 7% less income tax (5.25 sen net per ordinary share) for FY ended Dec 31, 2011.

For FY ended Dec 31, 2011, its earnings jumped 122.8% to RM325.43 million from RM146.02 million in FY10. Its revenue rose 64.8% to RM1.269 billion from RM769.94 million.

At the pre-tax level, MBSB made a record pre-tax profit of RM428.3 million, up 107% from  RM207.4 million a year ago. This contributed to improved basic net earnings per share of 32.43 sen and return on equity of 43%.

MBSB chief executive officer Datuk Ahmad Zaini Othman said: “Our group’s improved performance for the 12 months of 2011 is the result of the company’s persistent efforts to grow its retail business in the face of stiff market competition.”

He said continuous operational improvements as targeted under the transformation program, “Taking MBSB to the Next Level”, also contributed to the exceptional results.

“While the asset growth is largely driven by Personal Financing-i, our strategy to diversify asset portfolio beginning early last year has also shown remarkable progress,” he said.

As at Dec 31, 2011, net loan, advances and financing stood at RM15.2 billion, an increase of 42% as compared to RM10.7 billion as at Dec 31, 2010 which exceeded the banking industry’s average growth rate of 13.6%.