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KUALA LUMPUR, April 12 -- Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) has declared a 13 per cent dividend for the financial year ended Dec 31, 2020 (FY20) compared with 14 per cent in FY19.
Minister of Entrepreneur Development and Cooperatives Datuk Seri Dr Wan Junaidi Tuanku Jaafar said the payout amounted to RM373.36 million which will be credited into the accounts of 834,302 members effective today.
“Despite being faced with economic uncertainties last year due to the COVID-19 pandemic, the bank managed to record a commendable profit to allow it to continue paying a double-digit dividend.
“Bank Rakyat has been paying a double-digit dividend for almost 22 years now except in 1998 when it paid only eight per cent due to the financial crisis,” he told reporters after announcing the 2020 dividend payment here, today.
Meanwhile, Bank Rakyat chairman, Datuk Abdul Rani Lebai Jaafar said the shareholders’ fund increased by 6.2 per cent or RM1.22 billion to RM20.95 billion compared to RM19.73 billion previously, arising from the group’s net profit carried forward during the year.
“As at Dec 31 2020, Risk-Weighted Capital Ratio and Core Capital Ratio after the proposed final dividend remained strong at 24.14 per cent and 22.21 per cent respectively.
“These capital ratios were well above the minimum regulatory requirements and the industry average, positioning the group as one of the strongest banks in terms of capital position,” he said.
As for the bank’s FY20 financial performance, he said it recorded steady performance despite a lower net profit of RM1.38 billion versus RM1.65 billion in the previous year.
He said Bank Rakyat continued to be the most profitable co-operative bank, as well as the second largest Islamic financial institution in Malaysia because of strong fundamentals and its focus on core activities amid lingering uncertainties from the pandemic and post-moratorium impact.
“The bank saw a robust financing and investment activities with a slight decline in the financing income due to margin compression under the low Overnight Policy Rate (OPR) regime.
“Nevertheless, higher provisioning for potential non-performing financing (NPF), in line with the industry trend weighed on the profit,” he shared.
Abdul Rani said Bank Rakyat’s total assets also grew 1.8 per cent or RM1.95 billion to RM111.75 billion, compared to RM109.80 billion previously while deposits including current account and savings account (CASA) and term deposits stood at RM85.58 billion, as compared to RM83.83 billion previously.
Moving forward, acting chief executive officer Datuk Syed Abdul Aziz Syed Hassan said the group will continue to focus on new growth areas particularly from the untapped potential within its businesses and operations, in order to create long-term value to members.
He said the bank was well established in its retail financing space especially the personal financing space and looking to further diversify its portfolio into small and medium enterprises and cooperative segments financing.
“This is in line with Bank Rakyat’s BR25 strategic plan which is currently in the execution phase where several programmes have already been implemented this year which include the establishment of four new SME and Cooperatives Business Centres (SMECs) nationwide.
“We are targeting to disburse about RM7 billion financing to SMEs by 2025, and about RM400 million has been disbursed to date. Hence via SMEC we expect to better serve the needs of SMEs by providing them with better and faster service,” he said.
Syed Abdul Aziz said the bank’s loan growth for last year was almost 100 per cent considering the size of its capital.
“We hope to be able to sustain it for this year,” he added.