KUALA LUMPUR (May 5): Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat) has declared a 15 sen dividend per share, equivalent to 15% of its paid-up up capital of RM3 billion for the financial year ended Dec 31, 2016 (FY2016), higher than 13% it declared a year ago.

To pay for the FY2016 dividend, Bank Rakyat will be forking out RM450 million which will benefit some 950,000 of its members, said Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hamzah Zainudin.

"Even in challenging times, Bank Rakyat managed to score well in its financial performance, despite all the bad things that have been conveyed to me," Hamzah told reporters here today.

In FY2016, Bank Rakyat saw its net profit fell by 10.8% to RM1.16 billion from RM1.3 billion in FY2015, amid challenging domestic and external economic environment, said its recently appointed president and managing director Datuk Zulkiflee Abbas Abdul Hamid.

As for its total revenue, which comprised financing income and other operating revenue, Zulkiflee said Bank Rakyat recorded a 3.52% growth to RM6.66 billion in FY2016 from RM6.43 billion a year ago.

"Financing income remained as the top contributor for the bank, which was RM4.9 billion in FY2016," Zulkiflee said, noting that financing income growth was mainly driven by strong financing and treasury-related activities.

"The increase in financing income was due to high growth in retail financing, particularly in the personal financing segment," Zulkiflee said, adding that Bank Rakyat has managed to keep the ratio of non-performing loans below its 2% target.

This is despite Bank Rakyat recording a slight uptick in gross impaired financing ratio to 1.99% in FY2016 from 1.89% in FY2015.

"Still, it is among the lowest in the country, and the bank has a high financing loss coverage of 123.51%," said Bank Rakyat's chief financial officer Nor Haimee Zakaria.

Zulkiflee said Bank Rakyat expects its financing to grow by 6.5% this year, lower than 7.3% it recorded in FY2015, which will be mainly driven by personal financing.

"Bank Rakyat will also increase its fee-based and non-interest income going forward," said Zulkiflee.