BIMB not looking to exit stockbroking business

KUALA LUMPUR: BIMB Holdings Bhd, which posted a 12.3% jump in net profit for the six months ended June 30, 2018 (1H18), has no plans to dispose of its stockbroking arm BIMB Securities Sdn Bhd at the moment.
BIMB group CFO Malkit Singh Maan emphasised that BIMB Securities is still going to be part and parcel of the group.
This comes as BIMB Securities’ profit before zakat and taxation fell 84.1% in 1H18 to RM100,000 compared with the corresponding period in 2017 due to disposal of its investment portfolio.
“In a way it’s a blessing. They cleared their investment portfolio before the 14th general election. Had they not done that, the situation would have been worse. At least BIMB Securities has that foresight. Many houses did that as well – to clear the portfolio, go in and take a position as you move along.
“This year, they’ve launched their online portal for retail customers but the main core of the business comes from the corporate customers. As this is an Islamic outfit, many customers will come to BIMB Holdings. As a group, it (BIMB Securities) still makes sense at the moment,” Malkit told a press conference after announcing its 1H18 financial results today.
Bank Islam Malaysia Bhd acting CEO Mohd Muazzam Mohamed said the strength of BIMB Securities is in its instiutional customers while the strength of BIMB Invest is in its high net worth customers, adding that there is synergy for both business segments within the group.
Meanwhile, Muazzam said the group’s restructuring is being discussed at the shareholders level and that there is no concrete plan considered by the board. BIMB has long been mulling a group restructuring that involves its banking entity Bank Islam taking over its listing status on Bursa Malaysia.
He said Bank Islam’s cost-to-income ratio has come down to 51.6% in June, from 57% in December 2017, helping to improve its bottomline. Going forward, it aims to continue to register strong return on equity (ROE) by managing its deposit and operating costs.
“We’re improving asset yield by looking at the mix of financing asset, focusing on higher yielding asset, growing our non-fund based income, and more of fee-based income. Those are the measures that we’re taking to improve our profitability and our ROE,” he explained.
He said its financing growth hit 6.7% in 1H18 and is looking at an 8% growth for the full year.
It has also set aside a capital expenditure of RM300 million for the next three years for its digital infrastructure.
BIMB’s net profit for the second quarter ended June 30, 2018 rose 10.5% to RM149.91 million from RM135.67 million a year ago driven mainly by financing growth and improved margin. Revenue increased 5.2% to RM992.17 million compared with RM943.19 million in the previous year’s corresponding quarter.
For the six months period, its net profit jumped 12.3% to RM322.05 million from RM286.77 million a year ago, while revenue increased 6.91% to RM1.99 billion compared with RM1.86 billion in the previous year’s corresponding period.