Malaysia’s Bank Rakyat with record profit

Malaysia’s largest Islamic cooperative bank focuses on personal finance and attains record operating figures.

Bank Rakyat Bhd posted a record net profit for its financial year ended Dec 31, 2011, jumping almost 50% to US$654 million year-on-year.

Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Ismail Sabri Yaakob traced the record results to the bank's focus on growing its financing activities and improving asset quality.

“Personal financing remains the core contributor to Bank Rakyat's bottom line while the growth in income from its Islamic pawn broking venture, Ar-Rahnu, and investing activities also contributed to the overall growth in profit,” he said.

Income from financing increased to US$1.5 billion from US$1.3 billion a year ago. Total deposits grew 18% to US$19 billion while shareholders’ equity increased by 40% to US$2.7 billion in 2011 year-on-year.

“Asset quality also remained strong as at the end of December 2011, with a gross impaired financing ratio of 2.8%, in line with industry ratio of 2.7%,” he pointed out.

He said Bank Rakyat this year still seeks to grow its net profit to US$686 million despite the unfavourable economic environment and stricter banking guidelines from Bank Negara Malaysia, the central bank.

“The growth target is supported by our strength in personal loans and our non-performing loans that are still quite low at 2.8%,” he said.