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BANK PEMBANGUNAN MALAYSIA ANNOUNCES FINANCIAL RESULTS FOR THE YEAR 2020; INCREASES FINANCING PORTFOLIO TO RM18.5 BILLION

 

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Tuesday, 29 June 2021, Kuala Lumpur – Bank Pembangunan Malaysia Berhad (“BPMB”) held its Annual General Meeting (“AGM”) earlier today, where the Bank announced its financial results for the year 2020. BPMB also unveiled its second inaugural annual integrated report for the Financial Year ended 31 December 2020.

 

Improvement in Financing Portfolio for the Financial Year 2020  

Despite the challenging period due to the prolonged global pandemic, BPMB has achieved a 2.54% growth in its financing portfolio for the year, increasing its gross portfolio size to RM18.5 billion, the first growth since 2016. This is mainly attributed to higher disbursements from existing and new financings.

                                      

Financial Achievements for the Financial Year 2020

In 2020, BPMB undertook an exercise to redeem its borrowings totalling RM1.2 billion ahead of schedule. This was done to reduce the Bank’s Conventional liabilities as part of an effort to become a Full-Fledged Islamic Development Financial Institution and generate net finance expense savings. Consequently, this exercise has led to a drop in the Group’s total liabilities to RM15.5 billion in 2020, which represents a 7.5% decrease compared to last year.

 

The Group Gross Impaired Financing ratio (“GIF”) has shown a marked improvement to 11.3% in 2020 compared to 12.2% in 2019 due to a larger financing base as a result of the growth in the financing portfolio. In addition, Group overhead expenses also saw a slight dip to RM107.1 million in 2020 from RM113.5 million in 2019.

 

Financial Performance for the Financial Year 2020

The BPMB Group recorded a net profit of RM107.1 million for the Financial Year 2020, a decrease of 57% from RM251.6 million for the Financial Year 2019. This is primarily as a result of larger allowances for impairment losses on loans, financing and advances, which has increased by about seven times, attributed to the pandemic’s effects on the economy and the financial health of BPMB’s customers. Much of this allowance was for the construction sector and the hotel industry within the BPMB Group financing portfolio, with these two sectors contributing almost 75% of the total impairment allowance for 2020. Similarly, at the Bank level, a fall in net profit to RM100.8 million was recorded, which represents a 68% decrease from a year ago.

 

Helping Customers Navigate Through Challenging Times

In April 2020, the Government announced an automatic six-month loan or financing moratorium to retail and Small and Medium Enterprise (“SME”) customers of banks in the country. In accordance with this announcement, BPMB granted the same not only to its clients categorised as SMEs, but also to the Bank’s larger corporate clients who were facing difficulties. As of December 2020, the total value of the moratorium granted by BPMB stood at approximately RM7.1 billion, with the infrastructure and maritime sectors of the Bank’s portfolio making up the largest beneficiaries.

 

Additionally, targeted assistance was also granted to selected businesses that faced substantial financial strain upon the expiry of the automatic moratorium, via extensions or restructuring and rescheduling of their financial abilities. This was guided by BPMB’s philosophy to assist and not to compound the problems faced by all clients. 

 

Moving Forward Plans

BPMB’s Chairman, Y.Bhg. Dato’ Sri Nazir Razak said, “We anticipate another challenging year ahead with the pandemic expected to continue costing lives and impairing livelihoods for most of 2021. We will continue to adopt the safest work practices for our staff, be as understanding as we can to help our customers through these extraordinary times and step forward to assist the Government as it expands its role to mitigate the debilitating effects of COVID-19 on our economy and society.”

 

BPMB’s President/Group Chief Executive Officer, Arshad Mohamed Ismail said, “Moving forward into 2021 and beyond, BPMB will continue to support the Government to revitalise and reinvigorate the economy through our 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,” Arshad elaborated.

 

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About Bank Pembangunan Malaysia

Bank Pembangunan Malaysia Berhad (“BPMB”) was incorporated on 28 November 1973 as a development financial institution to assist small and medium-sized entrepreneurs. BPMB’s role includes the provision of various financing facilities, training and advisory services, particularly to Bumiputera entrepreneurs. Today, BPMB provides medium to long-term financing to the strategic sectors of the economy.

 

Owned by Minister of Finance (Incorporated), BPMB has been accorded the highest rating of ‘AAA’ by both RAM Rating Services Berhad and Malaysia Rating Corporation Berhad. It is regulated and supervised by Bank Negara Malaysia under the Development Financial Institution Act 2002.

 

With a Group Total Assets value of RM23.5 billion (as at 31 December 2020), the BPMB Group is well-positioned to meet the financing and business development needs of Malaysian businesses. 

 

For more information, please contact: 

 

Anita Ramly

Head, Corporate Communications

Bank Pembangunan Malaysia Berhad

Tel: (019) 332 4809

Email: anita.ramly@bpmb.com.my

Izzat Ratna

Senior Executive, Corporate Communications

Bank Pembangunan Malaysia Berhad

HP: (012) 642 1889

Email: izzat@bpmb.com.my