BIMB's Q3 results hit by lower takaful income

PETALING JAYA: BIMB Holdings Bhd registered a 13.8% drop in net profit to RM139.47 million for the fourth quarter ended Dec 31, 2016 versus RM161.86 million in the same quarter a year ago, mainly due to lower net income contribution from its takaful business.
Revenue declined 3.1% from RM884.26 million to RM856.81 million.
BIMB’s full-year net profit, however, rose 2.1% from RM547.28 million to RM559.04 million, thanks to higher earnings from both Islamic banking and takaful businesses. Revenue came in at RM3.53 billion, 6.6% higher than the RM3.31 billion it made a year ago.
In a filing with the stock exchange, BIMB said Bank Islam’s profit before zakat and tax rose 5.1% to RM720.4 million for 2016, with its net financing assets growing 14.3% to reach RM39.2 billion as at end-December 2016.
Correspondingly, fund-based income from financing increased RM239.3 million or 12.8%. Non-fund based income was higher by 17.3% or RM49.2 million, mainly due to higher gain derived from sale of investment securities.
The bank’s gross impaired financing ratio as at end-December 2016 improved to 0.98% compared with 1.09% as at end-December 2015. The net impaired financing ratio stood at a negative 0.75% as at end-December 2016.
BIMB said its takaful business posted profit before zakat and taxation of RM221 million for 2016, 8.2% higher than the RM204.2 million it made a year ago, buoyed by higher net wakalah fee income. It intends to continue to manage liquidity and deploy capital efficiently in line with the Basel III rules.
“Notwithstanding the need to sustain net income margin, preserving asset quality will remain an important agenda for the bank given the cautious operating outlook,” BIMB noted.