Malaysia’s Bank Islam Group posted 7.24% increase in profit before tax for the third-quarter compared to the same three months last year.
The bank reported in a bourse filing on Friday (Nov 29) 317.8 million ringgit ($76.16 million) in profit before zakat and tax for July-September versus 296.35 million ringgit for the corresponding quarter in 2018.
The Group is the parent company of Bank Islam, Syarikat Takaful Malaysia Keluarga and BIMB Securities.
The Group’s biggest growth earners were from income earned from investment account funds that grew by 66.7% to 97.88 million ringgit and net income from takaful reached 283.09 million ringgit, an increase of 24.63%.
Group assets at the end of September was 75.27 billion ringgit, up by 3.97% from the end of December.
Net financing and advances accounted for 64.05%, reaching 48.21 billion ringgit from 45.68 billion ringgit at December 31.
85.63% of gross financing, equivalent to 41.93 billion ringgit, were based on tawarruq.
However, customer deposits dropped by 3.83% to 47.54 billion ringgit.
Bank Islam, Malaysia’s oldest standalone Shariah-compliant bank, held 65.5 billion ringgit in assets, equivalent to 87% of the Group’s assets.
The bank’s profit before zakat and tax (PBZT) dropped by 7.2% to 208.8 million ringgit compared to 225 million ringgit for the third-quarter of last year.
“The decrease in PBZT was mainly due to higher finance cost and net allowance for impairment on financing and advances, net of recoveries by8.5 million ringgit and 8.0 million ringgit respectively,” the Group said.
SYARIKAT TAKAFUL MALAYSIA
The Group’s takaful susbsidiary posted PBZT of 121.8 million ringgit for July-September, an increase of 38.7% as compared to 87.8 million ringgit for the same period last year.
“The increase in profit was mainly attributable to increase in net wakalah fee income,” said the Group.
Family takaful, its biggest business line, earned gross contributions of 543.7 million ringgit compared to 436.7 million in 2018’s third quarter.
The increase was mainly due to higher sales from credit-related products, said the Group.
The Group believes it will be able to maintain “a stable outlook on profitability” for Bank Islam.
It expects its takaful subsidiary to further expand its market share by the end of 2019.
“To support business growth and customer centricity, the company will continue its digital strategy to build the full digital ecosystem and to expand the business focus beyond credit-related business to reach out to the wide retail customer base of major partner banks,” wrote the Group.
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