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Bank Islam’s PBZT For The First 9 Months Of 2011 Jumps 42 Percent

Highlights for the nine-month period under review:


  • PBZT expanded by 41.7% YoY to RM341.9 million
  • Solid net financing growth of RM1.4 billion or 14.9% YoY to RM13.3 billion. An annualised growth of 16.0%.
  • Customer deposits totaled RM26.1 billion of which CASA accounted for RM11.2 billion. At 42.8%, the CASA-to-deposits ratio remained remarkably high.
  • Continuous improvement to asset quality
    • Net impaired financing (net of individual assessment (IA) and collective allowances (CA)) totaled RM90 million as at end-September 2011 compared to RM128.1 million as at end-December 2010, a reduction of RM38.1 million
    • Net impaired financing ratio (net of IA and CA) stood at 0.7% as at 30 September 2011 vs. 1.1% as at 31 December 2010
  • Strong capital adequacy ratio at 15.8%

KUALA LUMPUR, Tuesday, 6 December 2011 – Bank Islam Malaysia Berhad (“Bank Islam” or “the Bank”) is set for another year of solid results by turning in a profit before zakat and tax (“PBZT”) of RM341.9 million in the first nine months of the financial year 2011 (FY2011), translating into a growth of 41.7% when compared to the corresponding period a year ago.

Commenting on the nine-month financial results, Managing Director Dato’ Sri Zukri Samat attributed the remarkable achievement to a robust financing growth; better product mix; continued improvement in asset quality; increased contribution from non-fund based income; the loyalty of the Bank’s current and savings account (“CASA”) customers and the implementation of cost containment measures.

Reflecting this good financial performance, Bank Islam’s gross Return on Equity (“ROE”) and gross Return on Assets (“ROA”) stood at 17.3% (end-December 2010: 16.5%) and 1.5% (end-December 2010: 1.2 %) respectively as at end-September 2011. The ability to maintain a high ROA of at least 1.5% thus far in 2011 is the result of the Bank’s continued efforts to reshape its balance sheet for optimal returns, achieving a well-balanced product composition and a better funding cost structure.

Although Bank Islam’s Risk-Weighted Capital Ratio (RWCR) fell below the 16%-mark to 15.8% (end-December 2010: 16.2%) as at end-September 2011, Dato’ Sri Zukri said he was still pleased with the strength of the Bank’s capitalisation ratios. While the Bank’s RWCR surpassed the Islamic banking industry’s average of 15.2%, its Tier 1 Core Capital Ratio also remained strong at 14.9% as at end-September 2011 (end-December 2010: 15.2%).

During the first nine months of FY2011, positive contribution from both types of income pushed total revenue up by 12.1% year-on-year to RM1.2 billion despite slower expansion rate of 9.4% for fund-based income compared to the corresponding period a year ago. However, the double-digit growth trend for non fund-based income remained uninterrupted, surging 38.1% year-on-year to RM135.6 million during the first three quarters of FY2011. From just 9.2% a year ago, the ratio of non fund-based income to total income rose to 11.3% as at end-September 2011. Net financings grew by 14.9% or RM1.4 billion to RM13.3 billion as at end-September 2011 from RM11.9 billion as at end-December 2010.

Notwithstanding the robust growth in the financing portfolio, the progress of the Bank’s asset quality enhancement continued as the net impaired financing amount (net of IA and CA) dipped 29.7% to RM90 million as at end-September 2011 compared to RM128.1 million as at end-December 2010. At 0.7%, the Bank’s net impaired financing ratio (net of IA and CA) showed further improvement as at end-September 2011, compared to 1.1% as at end-December 2010.

Bank Islam’s deposit structure continues to mirror its deliberate strategy in reshaping the balance sheet with increased emphasis given to lower funding costs in particular through CASA. Total customer deposits amounted to RM26.1 billion as at end-September 2011 of which CASA accounted for 42.8% versus 39.7% as at end-December 2010. Concomitantly, the Bank’s financing-to-deposits ratio rose to 52.6% as at end-September 2011 from 45.7% as at end-December 2010.

Recognising the many challenges ahead amidst the impending global slowdown and a host of other downside risks to the operating environment, Bank Islam will continue to remain vigilant in its asset acquisition and conduct prudent, responsible and transparent financing practices through adequate customer affordability evaluations and increased disclosure, all the for the purpose of enhancing consumer protection.

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