Bank Rakyat aims for more balanced portfolio

BANK Rakyat Malaysia Bhd, the country’s largest Islamic cooperative bank, has been enjoying good profitable growth over the years.

Source from (The Star Online): http://www.thestar.com.my/Business/Business-News/2013/07/06/Bank-Rakyat-aims-for-more-balanced-portfolio.aspx
Published: July 08, 2013

In 2008, the bank breached the RM1bil mark by raking in profit before tax and zakat totalling RM1.234bil. Since then, there is no turning back and earnings have steadily climbed, thanks to its strong balance sheet partly driven by consumer loans.

It posted a record profit before tax and zakat of RM2.11bil for the financial year ended December 31, 2012, up 4.7% from the previous year. During the year under review, it declared a total dividend of 18% and at a recent press conference the bank indicated a better showing for fiscal 2013. Income from financing increased to RM4.96bil from RM4.46 bil a year ago.

Its profit before tax and zakat for 2009, 2010 and 2011 stood at RM1.55bil, RM1.72bil and RM2.02bil respectively. For the first three months to March 31, 2013, profit before tax and zakat was RM539.52mil. In terms of total asset size, it has grown from RM41.7bil in 2008 to RM79.2bil in 2012.

Besides a strong deposit and asset base as well as healthy asset quality growth, close to 88.5% of the bank’s financing income comes from consumer banking while commercial banking accounted for only 11.5%. The bulk of consumer loans comprised of loans to government servants as more than 60% of its consumer/retail financing is contributed by the government sector.

The sizable composition of financing from government servants has strengthen the asset quality of Bank Rakyat, it said in a response to query from StarBizWeek, adding that RAM Ratings has consistently been rating the Bank at AA2. It also added that the bank has also implemented prudent responsible lending guidelines in line with Bank Negara’s aspiration that see only eligible applicants obtain needed financing.