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Bank Islam chalks up highest profit

KUALA LUMPUR: After posting two years of heavy losses, Bank Islam Malaysia Bhd has reported a turnaround for the year ended June 30, 2007 (FY07).
The bank chalked up its highest profit before zakat and tax of RM255.5mil on revenue of RM1.03bil compared with a loss before zakat and tax of RM1.28bil on revenue of RM948.9mil in FY06.
Managing director Datuk Zukri Samat attributed the strong performance to operational turnaround and the bank’s intensive loan-recovery programme.
“Going forward, we would like to grow our profit from operations. We expect contribution from operations to be substantial in the current financial year,” Zukri said after a briefing on its financial results.
On the bank’s progress in addressing legacy non-performing finances, he said a local party was currently conducting due diligence on the loans and a “carve-out plan” was expected to be finalised year-end.

Bank Islam Malaysia Bhd managing director Datuk Zukri Samat (centre) highlighting a point during his presentation of the bank's financial results for the year ended June 30 in Kuala Lumpur on Thursday. Looking on is chief operating officer Mohd Redzuan Devan Abdullah (first from left) and acting chief financial officer Adissadikin Ali (far right).

The “carve-out plan” is part of Bank Islam’s recapitalisation and restructuring programme to strengthen the balance sheet.
While treasury and corporate investment banking had been identified as potential avenues to grow fee-based activities, Zukri said fund-based income would continue to be the main revenue contributor to the company.
He also said the company was expected to enter into a strategic partnership with a European bank next month, which was in line with the company’s strategy of becoming a global Islamic banking player.
“It is not necessary that we have physical presence abroad to be a global player. It can be done through strategic tie-ups and offshore deals,” he said, adding that the company would continue to look out for strategic tie-ups.
Bank Islam’s total assets and customer deposits increased 30.9% and 22% to RM19.1bil and RM17.6bil respectively in FY07. Its earnings pre share was 17.4 sen compared with a loss of 175.2 sen in FY06.

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