Bank Rakyat posts net profit of RM1.15 bil in 2019

Bank Rakyat says its steady performance was achieved through a higher year-on-year net income of 3.26% due to growth in core operating income and a lower year-on-year funding cost of 1.62%.

KUALA LUMPUR: Bank Rakyat Group recorded a net profit of RM1.15 billion for the year ended December 2019 and a profit before tax and zakat of RM1.79 billion amid a challenging year.

The steady performance was achieved through a higher year-on-year net income of 3.26% due to growth in core operating income and a lower year-on-year funding cost of 1.62% following the cut in the Overnight Policy Rate (OPR) in the second half of 2019.

Chief executive officer Rosman Mohamed said the good performance was also achieved via strong fundamentals and being focused on core activities as well as on-going initiatives on increasing current accounts and savings accounts (Casa).

He said the group’s total assets grew 2.6% to RM109.62 billion in 2019, with year-on-year growth mainly contributed by financing and advances of 2.8% to RM70.97 billion.

Return on Assets (ROA) during the year remained healthy at 1.7% , well above the domestic banking industry of 1.6%.

In 2019, its gross financing balance grew to RM72.42 billion, despite the intense competition, benefitting the diversification of portfolios, mainly from home, car and business financing.

Bank Rakyat financing grew 12.3% to RM6.65 billion compared with RM5.92 billion previously, while car financing was up 11.2% to RM3.08 billion.

In addition, business financing, especially the cooperative segment was 9% higher at RM2.42 billion from RM2.22 billion previously.

“As part of diversification on other portfolios, personal financing balance stood at RM55.53 billion, increasing moderately by 1.2% or RM0.65 billion, in line with the group’s long-term strategy to reduce overall dependency on personal financing,” he said.

Rosman said the group’s deposits stood at RM83.83 billion in 2019 from RM82.74 billion previously. while Casa balances improved significantly at 15.1% to RM6.60 billion for the year.

“Bank Rakyat will continue to focus on internal restructuring, especially to harness the potential of business exploration and operations to create long-term value for shareholders.

“Next, Bank Rakyat will implement six frameworks, namely Digitalisation, Best Customer Experience, Human Capital, Small and Medium Enterprise Value Creation Centre (SME), and Sustainability and Shariah Leadership, which will be key to realising BR25 (Bank Rakyat 2025) aspirations,” Rosman added.

14% dividend announced

Meanwhile, Bank Rakyat Group announced a 14% dividend for the financial year ended Dec 31, 2019 compared with 13% the previous year.

The dividend payment will be made on March 29, 2020.

Entrepreneur and Cooperative Development Minister Wan Junaidi Tuanku Jaafar said this would involve a total payment of RM406 million to all its 842,847 members.

He said RM382 million would be paid to 840,590 individual members while RM24 million would be disbursed to 2,257 cooperative members.

“Bank Rakyat is always concerned about the needs of its members, where 30% of the individual recipients are from the B40 group, while 20% of the cooperative members are also from the B40 group,” he said today.

Therefore, he hopes the dividend payment will help ease the financial burden of an estimated 5.1 million Malaysians (based on four families) at the time when the country is facing the Covid-19 pandemic which also affects the economy.

“I wish to congratulate the board, management committee and all Bank Rakyat staff for their remarkable success once again,” Wan Junaidi said.