KUALA LUMPUR, Nov 29 -- BIMB Holdings Bhd (BHB) has posted a rise in net profit to RM208.4 million in the third quarter ended Sept 30, 2019 (Q3 2019) from RM198.6 million last year.
Revenue increased to RM1.19 billion from RM1.09 billion previously, the group said in a filing with Bursa Malaysia today.
During the quarter, Bank Islam Malaysia Bhd's (Bank Islam) profit before zakat and tax (PBZT) dropped to RM208.8 million from RM225 million in the corresponding quarter in 2018 on higher finance cost and net allowance for impairment on financing and advances, net of recoveries by RM8.5 million and RM8 million, respectively
Meanwhile, Syarikat Takaful Malaysia Keluarga Bhd (Takaful Malaysia) recorded a PBZT of RM121.8 million, an increase of 38.7 per cent from RM87.8 million in Q3 2018, attributable to the increase in net wakalah fee income.
Takaful Malaysia generated operating revenue of RM753.5 million compared with RM649 million in Q3 2018 due to higher sales generated by Family Takaful business.
Family Takaful business recorded gross earned contributions of RM543.7 million against RM436.7 million in Q3 2018 on higher sales from the credit-related products.
In contrast, General Takaful business generated gross earned contributions of RM171.9 million, down 2.9 per cent from RM177.1 million in Q3 2018, mainly attributable to fire and motor classes.
For the first nine-month period (9M 2019), BIMB Holdings’ net profit rose to RM606.1 million from RM520.7 million last year, while revenue was higher at RM3.53 billion compared with RM3.08 billion previously.
In a statement, BIMB Holdings said both the banking and takaful subsidiaries reported strong performance.
Bank Islam's PBZT for 9M 2019 was up 3.3 per cent to RM646.2 million compared with the same corresponding period in 2018 due to higher total income as a result of the increase in net financing of RM4 billion or 8.9 per cent year-on-year (y-o-y) and an increase in investment in financial instruments of RM1.6 billion y-o-y.
"On Nov 5, 2019, the Monetary Policy Committee of Bank Negara Malaysia decided to maintain the overnight policy rate (OPR) at 3.00 per cent.
"Although the OPR was unchanged, deposit rates are expected to rise as competition for deposits is expected to persist as banks brace for upcoming implementation of net stable funding ratio requirement. This would continue to compress the net income margin," BIMB Holdings said.
Nevertheless, profitability indicators are likely to remain intact, despite the challenging economic environment as the bank continues to expand while containing costs and would be pursuing digitalisation to boost non-fund-based income in the longer term.
Meanwhile, Takaful Malaysia recorded a PBZT of RM332.2 million in 9M 2019, an increase of 41.8 per cent compared with RM234.2 million in the same period of 2018 on higher net wakalah fee income arising from the growth in the Family Takaful business and higher net investment income.
Takaful Malaysia’s operating revenue increased by 21 per cent to RM2.34 billion from RM1.93 billion recorded in the same period in 2018, mainly due to higher sales generated by the Family Takaful business.
"Despite business sentiments remaining cautious in 2019, the takaful industry is expected to outperform the conventional insurers in view of the strong demand for takaful products.
"Takaful Malaysia is poised to further expand its market share in 2019," BIMB Holdings said.