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Bank Rakyat said the higher profit was contributed by financing and treasury activities coupled with more effective cost management procedures, despite the reduction of Overnight Policy Rate (OPR) which marginally affected the net profits.

KUALA LUMPUR: Bank Rakyat posted a profit before tax and zakat of RM1.29 billion for the first nine months ended September 2019.

This was an increase of four per cent from the RM1.24 billion a year ago, despite weaker consumer sentiment.

Bank Rakyat said the higher profit was contributed by financing and treasury activities coupled with more effective cost management procedures, despite the reduction of Overnight Policy Rate (OPR) which marginally affected the net profits.

“The good performance resulted in a rise of return on shareholders’ fund (ROSF) of 10.0 per cent,” Bank Rakyat said in a statement today.

Chairman Datuk Noripah Kamso said the bank had recorded an increase in its profit and loss from RM1.35 billion for year ending 2018 to RM1.42 billion at year ending 2019.

She said there had been a gradual uptrend in all of the bank’s customer financing as its strategy of diversifying into non-personal financing, namely hire purchase financing (HP), mortgages, pawn broking as well as commercial loans

contributed to the encouraging performance.

“As our profits grew, our retained profits have increased by RM1 billion which has been encouraging for the team and the board who have been focused on strengthening systems and processes, as well as governance in the group,” Noripah added.

The bank’s cost to income ratio (CIR) stood at a healthy 35.9 per cent, which is significantly lower than the domestic banking industry’s average CIR of 45.0 per cent.

Its asset quality remained resilient as the bank’s gross impaired financing improved from 2.3 per cent to 2.0 per cent through close monitoring and tracking.

Bank Rakyat said it was becoming a sustainable bank and improving its position as the most profitable Development Financial Institutions, as well as the second largest Islamic bank in Malaysia.

“Today, the group is the third largest Islamic institution, sixth by revenue, profit and asset size globally and the eighth and fastest growing Islamic finance institution in Far East Asia,” it added.

Noripah said the effects of BR25, its five-year strategic plan launched in August this year, can be seen next year.

“The group is incorporating the United Nation’s Sustainable Development Goals throughout the value chain of the Bank and expects to record operational optimisation and improvements in its 2020 announcements and onwards,” she added.

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