Kuala Lumpur: Dato' Ahmad Zaini Othman, the Chief Executive Officer of Malaysia Building Society Berhad (MBSB) presented the performance of MBSB Group to shareholders at MBSB's 40th Annual General Meeting held at Sime Darby Convention Centre, Bukit Kiara today.
Dato' Zaini announced that MBSB registered an encouraging performance in 2009 with a Group pre-tax profit of RM80.3 million, an improvement of 48.6% over the previous year of RM54.0 million. Similarly, at the Company level, the pre-tax profit improved by 31.3% to RM83.9 million as compared to the previous year of RM63.9 million.
He said the improvement was mainly attributed to the growth in net income from the Islamic banking operations and other income arising from an enlarged loan base. This was supported by an increase in corporate and retail deposits. The improvement was partially offset by higher allowances for losses on loans and advances.
MBSB Group's total net loans, advances and financing grew by 19.7% to RM8.1 billion in 2009. This was due to the growth of 27.1% in retail loans and financing in 2009, particularly Islamic financing, which contributed 101% to the overall growth. Conventional retail loans contracted by 1% as a result of lower loan releases.
The main business driver for 2009 was personal financing. Sales from this retail financing product grew sharply by 307.7% as compared to 43% for the previous year. However, Mortgage products continued to be the Company's key retail offering, accounting for 64.3% of the total net loans while Personal Financing stood at 16.1%.
MBSB Group's net non-performing loans ("NPL") increased slightly by 0.17% or RM2.7 million on the back of a RM1.3 billion net loan growth in 2009. Accordingly, with the increased loan base, the Group's NPL ratio for 2009 reduced to 19% compared to 23% in 2008.
Total deposits as at 31 December 2009 increased by 20% to RM7.6 billion as compared to the previous year of RM6.3 billion, in tandem with the loan growth. There was no revolving credit outstanding as at 31 December 2009 as MBSB had sufficient liquidity to support its business activities.
With the improved results, a first and final dividend of 4% less 25% income tax for the financial year ended 31 December 2009 was recommended to the shareholders for approval.
As a way to expand the Company's reach to its customers, MBSB has opened two new branches at Kulim, Kedah and Bintulu, Sarawak adding up to 32 branches in its operation nationwide.
MBSB's branches have undergone a remodeling process by changing the outlet concept from a Branch to a Sales and Service Centre model. With the implementation of this model, MBSB expects to improve the delivery of its products and services and extend personalized services to all its customers.
MBSB has, in 2009, embarked on CSR activities in line with efforts to improve best practices in CSR, focusing on the contribution towards development and livelihood of society. These activities were done through educational and community engagements.
Moving forward, MBSB will continue to focus on retail lending especially in Personal Financing as there remains a large market yet to be tapped. This strategy last year was able to generate higher than expected revenue within a short period. The second core activity will be Corporate Business with special concentration on Musharakah Business and Contract Financing. MBSB plans to also develop new sources of fee based income from its retail and corporate business products to further increase the Company's income.
In 2010, the Company's expansion programme will include the opening of Representative Offices and the development of an Islamic Hub in the East Coast Region. Two offices have been opened in Temerloh, Pahang and Kota Bharu, Kelantan. The Representative Office in Dungun, Terengganu will be opened soon.