KUALA LUMPUR (June 7): Bank Muamalat Malaysia Bhd posted a 41.58% increase in net profit to RM222.78 million for the financial year ended Dec 31, 2022 (FY2022), compared with RM157.35 million a year earlier, driven by increased distributable income and robust financing growth.

Bank Muamalat said that distributable income increased by 19.6% as a result of an increase in total gross financing assets. It added that total overheads and expenditures increased by 12.8% to RM452.8 million in tandem with business growth.

Based on the audited financial report for FY2022 on its website, Bank Muamalat saw total revenue of RM1.34 billion, up 17.82% from RM1.14 billion for FY2021.

According to the group’s press statement on Wednesday (June 7), its profit before zakat and taxation of RM306.7 million, 20.3% higher than RM254.9 million for FY2021, was its highest ever.

Bank Muamalat president and chief executive officer Khairul Kamarudin said the group also registered growth in total assets, which expanded by 14.4% to RM31.5 billion, compared with RM27.6 billion in FY2021.

“This was largely contributed by a 16.2% growth or RM3.3 billion increase in total financing to customers, from RM20.7 billion to RM24.0 billion, as of Dec 31, 2022, mainly from the consumer banking segment,” he said.

The group reported that its asset quality remained low, with gross impaired financing standing at 0.85% as at end-December 2022, a marginal increase compared with 0.83% a year earlier.

Meanwhile, the group’s common equity Tier 1 (CET1) ratio at 12.5% and total capital ratio at 17.6% were stable and well above regulatory requirements.

Going forward, Bank Muamalat said it remains cognisant of the evolving economic outlook for 2023, including the effect of past interest rate hikes by major central banks and the ongoing war in Ukraine, along with heightened geopolitical risks.

It said the reopening of China’s economy, coupled with Bank Negara Malaysia's accommodative monetary policy stance, would allow financial intermediation activities to grow at a sustainable pace.

Besides that, Bank Muamalat said a higher allocation for development expenditure totalling RM97 billion in Budget 2023 would serve as a catalyst for domestic demand.

“Bank Muamalat is ready to navigate these challenges, with support from our staff and stakeholders, to record another important milestone in FY2023," Khairul said.

The group has also released its unaudited financial results for the period ended March 31, 2023 (1QFY2023) on its website, reporting that its latest quarterly profit dropped 22.7% to RM33.51 million, from RM43.35 million previously.

However, revenue rose 32.81% to RM89.26 million for 1QFY2023, from RM67.21 million a year earlier.

Bank Muamalat said its financial performance was partially offset by higher income distributable to depositors, up RM82.3 million or 85.4%, arising from stiffer rate competition in the market, which led to net profit margin compression.

“This was coupled with higher charges in allowances for impairment loss on financing of RM14.9 million, compared with RM4.3 million for the same period last year,” it said.

As at end-March 2023, total assets of the group stood at RM33.4 billion, an expansion of 5.8% from RM31.5 billion registered at end-December 2022, contributed by more financing assets and cash and short-term funds, in tandem with an increase in deposits of customers.

The group's capital ratios remained stable, with the CET 1 standing at 12.17% and total capital ratio at 17.07%, Bank Muamalat said.