Key initiatives propel Exim Bank back to the black

Source From (The Star Online): http://biz.thestar.com.my/news/story.asp?file=/2012/5/24/business/11346372&sec=business

Published: Thursday May 24, 2012
By DALJIT DHESI
daljit@thestar.com.my

KUALA LUMPUR: Export-Import Bank of Malaysia Bhd (Exim Bank) bounced back to profitability with a net profit of RM176.3mil for the financial year ended Dec 31, 2011 after incurring a net loss of RM300mil a year earlier due to a combination of key initiatives implemented to improve business and operational effectiveness.
Its managing director and chief executive officer Datuk Adissadikin Ali said these initiatives included the introduction of the corporate improvement programme to improve the overall delivery system, processes, corporate and risk governance, as well as the overall efficiency of the bank's operations.
Pre-tax profit stood at RM134.6mil against a loss before tax of RM299.5mil previously, translating its earnings per share (EPS) to 6.51 sen compared with a loss of 11.08 sen. Its operating revenue grew 27.5% to RM171.6mil from RM134.6mil a year earlier.
He said the bank was targeting higher loan approvals worth RM6bil and disbursements amounting to RM1.5bil this year of which the bulk of its financing was to the small and medium enterprises (SMEs).
Currently, he added about 80% of its borrowers comprised of SMEs, manufacturing, construction, investment and commodity trading sectors. The other borrowers are the large corporations, especially the government-linked companies.
Last year, the bank approved total loans and disbursements amounting to RM4.7bil and RM1.2bil respectively. To strengthen the capacity of the bank in line with the increasingly sizeable requirements of the Malaysian companies and investors that were fast spreading their ventures abroad, he said the shareholders funds of the bank had been increased from RM2.6bil in 2010 to RM2.8bil last year.
This would go a long way in ensuring that Exim Bank continued to thrive as a vibrant and active development financial institution for Malaysian exporters and investors over the medium and long term, he noted.
To expand its reach and provide better options to its clients, Adissadikin said the bank introduced takaful products namely Comprehensive Takaful Shipment and Specific Takaful.
These takaful schemes portrayed a transparent business operation through a Wakalah model, with an opportunity for the participants to a share of investment profits, he added.
The banking business remains its core revenue earner contributing about 40% to Exim Bank's total income for last year, he said, adding that trade credit insurance was fast gaining momentum as it protect exporters for non-payment by overseas buyers although its level of awareness was still relatively low.
Adissadikin said the bank's new markets for its customers were mainly in Asia, including the Middle East and north Africa, noting that there was growing enquiries from Malaysian businesses planning to venture into other African countries (excluding North Africa) and Central Asia.