MBSB Q1 net profit down 36% to RM124mil

KUALA LUMPUR: Malaysia Building Society Bhd's (MBSB) net profit for its first quarter ended March 31, 2015 fell 36% to RM124.31mil from RM196.73mil a year ago.

In a filing to Bursa Malaysia on Thursday, the group said revenue for the quarter rose 3.5% to RM690.6mil fom RM667.11mil a year ago.

Earnings per share for the period fell to 4.59 sen from 8.37 sen the previous year.

The group said its higher revenue was due to the company's efforts in penetrating the corporate segment, resulting in a slight asset growth amidst a challenging retail banking environment.

Meanwhile the decrease in earnings was mainly due to higher allowances for impairment losses on loans, advances and financing and lower operating income on the back of higher revenue growth. 

The higher allowances for impairment losses are in line with the group’s ongoing impairment programme under its strategy to align its policies with industry best practices and banking standards.
 
For its personal financing segment, gross income in the current period was lower compared to the previous year corresponding period due to lower disbursements, while income from loans and financing was higher from increasing growth of corporate loans and financing assets bases.

For its mortgage loans and financing, gross income was relatively consistent with the previous year corresponding period.

Auto finance loans and financing was higher mainly due to increasing growth of loans and financing bases.

Moving forward, MBSB said its remained focused on the expansion of corporate business segment where it continued to show positive contribution, notably growth in corporate financing/loans assets and earnings whilst the retail segment businesses have been moderate. 

"The operating environment remains challenging and to meet these challenges, the group will continue to strengthen, adapt and sustain its corporate and retail business activities. 

"These activities include strategies for continued improvement in compliant operational workflows, enhancing assets quality based on risk management framework and funding from capital markets," it said.

Barring any unforeseen circumstances, the group expects a satisfactory performance in 2015.