Photo by Mohd Izwan/The Edge

KUALA LUMPUR (Aug 30): Bank Islam Malaysia Bhd's net profit for the second quarter ended June 30, 2022 (2QFY22) fell 39.71% to RM117.16 million from RM194.33 million in the same period last year (2QFY21), as it reported lower net income and higher overheads.

The country's first public-listed Islamic bank said its net income dropped RM43.4 million or 7.3% due to lower non-fund-based income, which fell RM73.4 million or 63.2% on lower investment income. The decline was mitigated by higher net fund-based income during the quarter, which grew RM27 million or 6%, driven by financing growth.

The group's overheads during the quarter under review rose RM37.5 million or 13.6% over 2QFY21's, mainly because staff costs rose RM23.2 million and general expenses climbed RM10.3 million, its Bursa Malaysia filing showed.

Group revenue dipped to RM823.02 million from RM834.34 million. Earnings per share (EPS) fell to 5.44 sen from 7.44 sen previously. No dividend was declared.

For the cumulative first half ended June 30, 2022 (1HFY22), Bank Islam's net proft dropped 36.81% to RM223.07 million from RM353.04 million posted in the same period a year earlier, while revenue dipped to RM1.6 billion from RM1.61 billion.

The lower 1HFY22 net profit was mainly due to lower net income, which was compounded by higher overheads and net allowance for impairment on financing and advances. As such, 1HFY22 EPS dropped to 10.39 sen from 13.54 sen.

Going forward, Bank Islam anticipates slower household financing numbers and said rising inflationary pressures can potentially threaten its provision on financing as it affects customers and businesses' debt servicing capability.

Nevertheless, it expects total industry growth to be lifted by higher business activities following border reopening and a positive economic environment.

"Bank Islam remains committed to pursuing its business drivers under the five-year aspiration LEAP25 while ensuring cost management and optimisation, continuous group's synergy strategy implementation, and advancing digitalisation.

"On that front, the group has launched its digital banking proposition, 'Be U' in mid-July 2022 — the country's first digital bank that is built natively on cloud. This is aimed at the younger population, hoping to attract between 350,000 and 400,000 downloads and users within the first 12 months," it said.

Bank Islam's share price finished unchanged at RM2.61 on Tuesday (Aug 30), bringing the group a market capitalisation of RM5.63 billion.