PETALING JAYA: Malaysia Building Society Bhd’s (MBSB) net profit slumped 73.5% to RM83.83 million for the first quarter (Q1) ended March 31, 2019 against RM316.79 million in the previous corresponding period, dragged down by higher expected credit losses.
Revenue for the quarter also fell 3.8% to RM784.04 million from RM815.04 million.
The group said in a filing with the stock exchange that the increase in expected credit losses as due to writeback recorded in Q1 18 as a result of staging improvement from stage 2 to stage 1 impairment.
Its net income stood at RM365.03 million in Q1 2018, 5.01% higher than the RM347.63 million recorded in Q1 2019.
MBSB’s gross loans and financing stood at RM35.44 billion in Q1 19, consistent with RM35.17 billion recorded in Q1 8.
Net impaired financing ratio was at 2.11% in Q1 19, an improvement compared to 2.39% in Q4 18 but regressed compared to 1.82% in Q1 18. Gross impaired loans, financing and advances coverage ratio stood at 114.47% in Q1 19 compared with 106.03% in Q4 18.
MBSB said its capital position remains strong as common equity tier 1 ratio stood at 20.95% as at March 31, 2019, well above Bank Negara Malaysia’s prescribed ratio of 7.0%. Liquidity coverage ratio came in at 228.18% in Q1 19 from 210.33% in Q4 18.
MBSB’s cost-to-income ratio improved to 26.34% in Q1 19 compared to 26.71% in Q1 18, but slightly regressed compared to 25.17% in Q4 18.
Group MBSB group president and CEO Datuk Seri Ahmad Zaini said the rise in cost is expected as it has been developing and integrating the banking platform for the first few months of the year to provide enhanced products and services and stay competitive in the industry.
Commenting on the 2019 outlook, he said while the Malaysian economic condition remains challenging, the group will remain focused in expanding its banking capabilities.
“With this, the bank’s technology transformation shall continue to be in the centre stage. On another front, we also aim to increase our fee income-based activities to make up 35% of its income by end of 2020.”
At the midday break, MBSB’s share price gained 0.5% to 97.5 sen on 452,800 shares done.
