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THE EDGE FINANCIAL – Bank Pembangunan’s group net profit dips 57% to RM107.1 mil in FY20
Tuesday, 29 June 2021

KUALA LUMPUR (June 29): Bank Pembangunan Malaysia Bhd’s (BPMB) net profit at the group level was slashed by 57% to RM107.1 million for the financial year ended Dec 31, 2020 (FY20), from RM251.6 million in the previous financial year, as a result of larger allowances for impairment losses on loans, financing and advances which increased by about seven times.

At the bank level, net profit decreased 68% year-on-year (y-o-y) to RM100.8 million.

In a statement after its annual general meeting today, it said much of the allowance was for the construction sector and the hotel industry within the BPMB group financing portfolio, contributing almost 75% of the total impairment allowance for 2020.

However, it said the gross impaired financing (GIF) ratio showed a marked improvement to 11.3% in 2020, compared with 12.2% in 2019, due to a larger financing base as a result of the growth in the financing portfolio.

“Despite the challenging period due to the prolonged global pandemic, BPMB has achieved a 2.54% growth in financing portfolio for the year, increasing gross portfolio size to RM18.5 billion, the first growth since 2016.

“This is mainly attributed to higher disbursements from existing and new financings,” it said Moving forward, Chairman Datuk Seri Nazir Razak said BPMB would step forward to assist the government, as it expands its role to mitigate the debilitating effects of Covid-19 on the economy and society.

Meanwhile, president and group chief executive officer Arshad Mohamed Ismail said BPMB would continue to support the government to revitalise and reinvigorate the economy through its various products and financing solutions, with an emphasis on digitalisation, inclusivity and sustainability.

“We recognise that we have a counter-cyclical role to play to ensure those who are most vulnerable are able to brave through the next few years and come out ready to navigate the much anticipated economic upturn and drive Malaysia into a high-income economy,” he added.