KUALA LUMPUR: Malaysia Building Society Bhd (MBSB) reported 54% jump in its net profit for the financial year ended Dec 31, 2018 at RM642.20mil, underpinned due to lower impairment allowances and partly set off by higher operating expenses. 

It announced on Thursday the stronger earnings when compared with RM417.12mil  in FY17. The group’s revenue at RM3.15bil for FY18 is consistent with RM3.26bil recorded in FY17.  

MBSB group president and CEO Datuk Seri Ahmad Zaini Othman said: “2018 was an eventful year for us as we completed the successful acquisition of Asian Finance Bank Bhd on Feb 7, 2018. 

“We had only merged the business and operations of the two entities on April 2, 2018. From then on, we began implementing our plans to build up the core banking capabilities for the new merged entity.” 

Ahmad Zaini said that 95% of 2018’s income was derived from the existing lines of business and the remaining 5% from new offerings. 

He said this was within its expectations as it had focused its time and resources significantly on building the banking infrastructure to enable it to roll out new capabilities such as Corporate and Retail Internet Banking, SWIFT and RENTAS, Cash Recycling Machine/ATM, and trade finance. 

“Concurrently, we grew the existing core business to ensure growth in financing as well as fee based income,” he said.

Gross financing and loans edged up 2.84% from RM34.20bil (FY17) to RM35.17bil (FY18). Total assets stood at RM45.42bil versus RM44.81bil in FY17. 

MBSB's net impaired financing ratio was 2.39% in FY18 versus 2.11% in FY17 due to impairment allowance write backs mainly for corporate portfolio in Q4,FY18.

In the fourth quarter, its  net profit fell by 4.8% to RM117.95mil from RM123.98mil a year ago. Its revenue declined by 8.3% to RM750.35mil from RM818.27mil. Earnings per share were 1.88 sen compared with 2.09 sen.