KUALA LUMPUR, Feb 25 — Investment corporation Malaysia Building Society Berhad (MBSB) has reported a net profit of RM269.32 million for the fiscal year end of 2020 (FYE20) dropping by over half compared to its profits at the end of 2019.
Its FYE19 net profit stood at RM716.90 million, making the decline in net profit for 2020 at 62.43 per cent or RM447.58 million. The decline has been attributed to higher impairment losses and modification loss as a result of the loan financing moratorium granted to customers in 2020.
Similarly, MBSB’s Profit Before Tax (PBT) was registered at RM427.64 million in FYE20, in comparison to the RM897.43 million in FYE19, making it a drop by 52.35 per cent or RM469.79 million.
The group’s total assets fell by RM2.27 billion or 4.48 per cent from RM50.71 billion in FYE19, mainly due to a decline in interbank placements. Its deposit also declined slightly to RM33.88 billion from RM35.89 billion in FYE19.
However, its revenue increased by 4.43 per cent or RM133.50 million from RM3.01 billion in FYE19, which has been attributed to the higher gain on sale of financial investments in FYE20, which produced RM249.60 million when compared to RM60.02 million in FYE19.
Another positive development is MBSB’s Cost to Income Ratio, which stood at 24.45 per cent, an improvement by 3.92 per cent from 28.37 per cent in FYE19. But the Return on Equity recorded lower at 3.09 per cent against 8.76 per cent in FYE19, while Return on Assets is at 0.55 per cent or lower by 0.94 per cent compared to the 1.49 per cent in FYE19, which is in line with the decline in the overall net profit.
Group president and chief executive officer Datuk Seri Ahmad Zaini Othman said the group has made a gradual recovery while navigating a highly uncertain economic environment.
“While we were hit by a substantial modification loss of RM504.75 million in FYE20 due to blanket automatic moratorium granted by the government, it has been more manageable now due to implementation of a more targeted assistance to those in need,” he said in a statement.
Ahmad Zaini also touched on some of the fundamental developments that happened at MBSB’s wholly owned banking subsidiary, MBSB Bank in the fourth quarter of 2020 (4Q20).
“Our Trade Finance portfolio remains strong, contributing RM1.10 billion in that quarter. On top of that, our e-Prime Term Deposit-i campaign which was launched in November 2020 received an overwhelming response that the target was achieved within two months from the launch date.
“Concerning the Bank’s moving forward plans, this includes an additional capital injection from its holding company MBSB. We anticipate capital injections over the next three years, to further strengthen the Bank Group’s capital position,” he said, adding that the group is also planning to work on growing its fee-based income, such as wealth management, and the lowering of its gross impaired financing ratio.