Bank Islam's FY2022 net profit dragged by higher tax expense

KUALA LUMPUR (Feb 27): Bank Islam Malaysia Bhd’s net profit dropped 8% to RM491.67 million for the financial year ended Dec 31, 2022 (FY2022) as its tax expense surged 53.2% to RM241.51 million due to the one-off prosperity tax (Cukai Makmur).

Its profit before zakat and taxation (PBZT), however, improved 6.1% to RM746.87 million, contributed by higher net income and lower net allowance for impairment on financing and advances, it said in a filing with Bursa Malaysia on Monday (Feb 27).

Revenue also jumped 12.9% to RM3.58 billion for the year, while net income rose 5.5% to RM2.31 billion.

In a statement on Monday, the bank attributed the surge in the group’s net income to higher net fund-based income, which increased by RM247.2 million or 13.5%, primarily driven by year-on-year (y-o-y) financing growth.

The group’s overall performance translates to earnings of 22.86 sen per share and a net return on equity of 7.5%.

Its board has proposed a second interim dividend of 3.4 sen per share, bringing the total proposed annual dividend to 13.8 sen per share for a payout ratio of 60% of net profit, in line with the group’s dividend policy.

On a quarterly basis, Bank Islam registered a PBZT of RM187.31 million for the fourth quarter ended Dec 31, 2022, primarily due to higher net income driven by financing growth.

It said at the end of December 2022, the group’s total assets stood at RM89.9 billion, with a y-o-y growth of 12.1%.

“With improved economic activities, gross financing grew by 11.4% y-o-y to RM65.9 billion.

“Total current, savings and transactional investment accounts (CASATIA) grew 3.2% y-o-y to stand at RM27.7 billion while the group’s total capital ratio remained strong at 19.4%,” it said.

As of Dec 31, 2022, the gross impaired financing ratio was 1.27%, which remained better than the industry average of 1.7%.

Group chief executive officer Mohd Muazzam Mohamed said as the economy is recovering steadily, Bank Islam continues to build on its core strengths.

“Among the measures taken are improving our mobile banking application and building strategic partnerships that benefit all parties involved. Bank Islam looks to provide financial solutions across segments through its retail banking distribution and premier wealth banking,” he said.

He added that the group aims to double its shariah environmental, social and governance (ESG) assets to RM4 billion by the end of 2025.