By Ahmad Naqib Idris / The Edge Financial Daily | March 24, 2015
KUALA LUMPUR: Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) announced a 15% dividend payout after its net profit grew 2.7% to RM1.96 billion for the financial year ended Dec 31, 2014 (FY14), compared with RM1.91 billion the previous year.
It also saw a record high profit before tax and zakat of RM2.16 billion for FY14, up 1.6% from RM2.13 billion in FY13.
“Bank Rakyat has performed well in 2014, despite the challenging economic environment, following the fall in commodity prices and the ringgit,” Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek told a news conference to announce the cooperative bank’s results yesterday.
The bank’s total dividend distribution for FY14 — at 15% — was at RM450 million compared with RM446 million in FY13, which was also at 15%.
“A 15% dividend payout is considered high, in terms of yield. So we maintained the same dividend payout as in 2013,” said Bank Rakyat managing director Datuk Mustafha Abdul Razak.
Bank Rakyat reported a gross income of RM5.98 billion, contributed mostly by income of RM4.53 billion from financing. Its other operating income was up 9.44% at RM571.56 million from RM522.26 million in the previous year, largely due to recoveries on financing written off of RM205.92 million.
Its gross financing balance climbed 5.6% year-on-year to RM62.1 billion, while consumer gross financing increased by 7.3% to RM56.71 billion.
The bank reported a 7.6% growth in assets to RM89.18 billion, while its return on assets remained strong at 2.5%.
Total deposits for the year expanded 4.9% to RM68.52 billion, with retail deposits accounting for 16.9% of the total compared with 16% in FY13.
Non-performing loans (NPL) were lower at 2% in FY14 compared with 2.2% in FY13.
“We are improving our underwriting standards and our NPL will continue to improve further. We would like to bring them to be on par with the industry’s standard of 1.7%, within this year or the next,” said Mustafha.
He said the bank sees a big potential in the non-government market, and would like to expand its footprint in the private segment.
“If you look at the number of people, that are working in Malaysia, of about 13.2 million workers, 1.5 million of them come from the government sector. So there is a market of about 12 million employees in the private sector. If we can capture about 3% to 5% or so of this market, it is already a lot. We are already targeting this new market but we are still very cautious as we want to make sure the quality of the asset is good,” said Mustafha.