KOTA KINABALU: Sabah Development Bank is on track to achieve its recovery target of RM1 billion each year until 2026.
"Supported by the Sabah Finance Ministry, the bank has received repayments of RM1.9 billion in legacy loans from government-linked companies and reduced its bond repayment obligations from RM5 billion in July last year to RM3.3 billion by July this year.
"Significant progress has been made in reducing non-performing loans to RM5 billion, which are secured against land and commercial assets.
"SDB is on track to achieve its recovery target of RM1 billion this year, with similar targets set for the next two years," it said in a statement.
A new board and management team was appointed in the second-half of last year to resolve the financial issues in the debt-laden state-owned subsidiary.
The statement said that the Sabah government was firmly committed to meeting all bond repayment obligations and ensuring the bank's financial stability.
SDB was committed to its new mandate of focusing on development projects in the state's critical sectors, including water, power and infrastructure under stringent credit and risk management guidelines.
To further strengthen its capital base and meet Bank Negara Malaysia's capital adequacy ratio guidelines, the state Finance Ministry had converted RM660 million of its fixed deposits in SDB into redeemable preference shares.
The state government had designated SDB as the lead lender for local content financing in major investments across Sabah, collaborating with reputable commercial banks and Development Financial Institutions.
RAM Rating Services had also reaffirmed SDB's debt instruments rating at AA1.
The bank had announced a pre-tax loss of RM878 million (net loss RM684 million) for the Financial Year (FY) last year as per its audited results.
It was anticipating a substantially reduced pre-tax loss of approximately RM100 million for this year's FY.
The losses were mainly due to Non-Performing Loans (NPLs) and reduced asset values over the years. SDB had reported yearly profits for past years.
https://www.nst.com.my/news/nation/2024/08/1095279/sabah-development-bank-track-recovery
Created by savemalaysia | Aug 22, 2024
Created by savemalaysia | Aug 22, 2024
Created by savemalaysia | Aug 22, 2024
Created by savemalaysia | Aug 22, 2024
Created by savemalaysia | Aug 22, 2024
Created by savemalaysia | Aug 22, 2024