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Bank Islam Expects Financing Growth To Exceed Industry Average This Year
Managing Director Datuk Seri Zukri Samat said consumer financing accounted for 75 per cent of its financing portfolio.
He, however, said Bank Islam would be affected by the slower demand for financing from consumers due to stringent measures in place and increasing inflation.
"But the slowing down is not expected to drag financing growth below the industry average of 10 per cent.
"While we are not expecting financing growth as much as 21.7 per cent but I think we are looking at a growth rate exceeding the industry average," he told reporters after launching Universiti Malaysia Pahang (UMP)'s University Debit Card-i (UniDebit) here today.
For the financial year ended Dec 31, 2013, Bank Islam's financing portfolio grew 21.7 per cent to RM23.7 billion, surpassing the industry average of 10 per cent, driven by strong demand from consumer financing which grew 24 per cent while commercial financing reported a healthy growth of above 30 per cent.
The bank posted a record pre-tax profit and zakat of RM683 million, up 13.8 per cent or RM82.7 million, from 2012 while revenue topped the RM2 billion mark at RM2.2 billion.
The higher revenue was due to solid financing growth, diversified revenue stream, continued increase in deposits through current and savings accounts, growth in non-fund-based income and improvement in asset quality.
Zukri said while financing portfolio grew 21.7 per cent last year, asset quality improved with the amount of gross impaired financing declining to RM285.3 million, from RM308.7 million in the previous year, gross impaired ratio dropped to 1.18 per cent from 1.55 per cent and financing loss coverage ratio increased to 175.8 per cent from 142.6 per cent, previously.
Besides, he said total deposits expanded 14.4 per cent or 4.7 billion to RM37.3 billion driven by its portfolio of competitive and attractive products.
On prospects, Zukri said this year would be more challenging as demand for financing from the consumer sector was expected to slow down weighed by the tightening measures and rising inflation.
"All this measures (guidelines on responsible lending) basically means the people will be holding on to their cash and the demand for the products will be mush lesser.
"Inflation is also expected to go up slightly this year and people are basically holding back their purchases and finance. That is why we expect the slowdown in consumer financing," he said.
Meanwhile, on the UMP UniDebit card, he said the card was tailored specifically for students, providing them with several additional functionalities over the standard debit card such as university and library access and student identification.
As of December 2013, the card business contributed RM130 million to Bank Islam's total income and RM94 million to gross profits.
The bank has 2.3 million cardholders, with debit cards accounting for the bulk (1.6 million holders) followed by credit cards (700,000 holders).
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