BIMB Holdings Bhd (BHB), reported its net profit attributable to shareholders rose 3.3 percent to RM209.2 million for the first quarter (Q1) ended March 31, 2020.
In a statement, BHB said Bank Islam’s profit before zakat and tax for 1QFY20 increased by a marginal 0.8 percent year-on-year (y-o-y) to RM221.5 million on higher total net income.
It’s y-o-y net financing assets grew RM4.4 billion or 9.5 percent to reach RM50.4 billion as at the end of March 2020, however, lower fund-based income was reported due to multiple downward revisions made on Overnight Profit Rate from 3.25 percent in the previous corresponding period to 2.50 percent for the 1Q20.
Customer deposit and investment accounts were up 3.1 percent y-o-y to RM55.5 billion as at the end of March 2020. Total current and savings accounts and transactional investment accounts stood at 35.9 percent of total customer deposits and investment accounts.
Meanwhile, Takaful Malaysia reported PBZT of RM114.2 million up from RM113.3 million a year earlier, due to lower expense reserves which in line with the lower productions from group medical products. But, quarterly revenue was down by 0.56 percent y-o-y to RM913.04 million.
BIMB noted that the rate cuts totalling 100 bps in the first half of 2020 will put a squeeze in banks’ net income margin and overall profitability. In addition, the six (6) months moratorium on financing repayment will result in a one-off provision in line with MFRS 9 to be absorbed by banks.
Bank Islam has adopted value-based intermediation at the heart of its business model where it aligns its measures in accordance with Bank Negara Malaysia’s guidelines which place emphasis on protecting consumers’ financial viability, sustaining real economy, focusing on affordable investing and continue to support the frontline workers and underprivileged communities.
The Bank’s initiatives further reflect our commitment towards financial inclusivity, which ensures development for all and that no one is left behind as we seek to build towards a peaceful and dignified nation.
As for Takaful Malaysia, it will continue with its innovative strategies via the implementation of its digital strategy, the introduction of online solutions, expansion of its distribution capabilities, strategic partnerships with leading Islamic banks and Brand awareness initiatives.
To support business growth and customer-centricity, Takaful Malaysia will continue its digital strategy to build the full digital ecosystem.
Takaful Malaysia is prepared for a very different market and operating landscape post MCO period as concerns on job security remain heightened, and consumers will be more cautious on their spending. It is expected that economic activities will take some time to recover.