KUALA LUMPUR (Feb 24): Lembaga Tabung Haji (TH) announced a profit distribution of 3.1% after zakat for 2021, totalling RM2.46 billion, which will benefit more than 8.4 million depositors.
The profit distribution rate is similar as in 2020. According to TH, the total profit distributed for 2021 is RM219 million higher than the RM2.24 billion that was distributed for 2020.
The pilgrim fund recorded revenue of RM3.24 billion in 2021, up 2.9% from RM3.15 billion in 2020. It noted that fixed income and equity investments have supported income resilience in 2021, accounting for more than 70% of the total.
TH highlighted that its financial position remained strong with assets amounting to RM88.73 billion exceeding liabilities by RM85.51 billion as at Dec 31, 2021. Total operating costs also dropped by 4% compared to 2020 as a result of prudent financial management measures.
Total deposits guaranteed by the government have reached RM83.33 billion — the highest in the history of TH since its establishment 59 years ago, the fund added.
“Fixed income investments (sukuk) have generated RM1.70 billion which accounts for 52% of its total gross income. Income from equity investments has contributed RM650 million which accounts for 20% of total income for 2021 and is 38% higher than RM470 million for 2020. Real estate investments earned RM420 million while Islamic money market investments generated revenue of RM290 million.
After taking into account expenditure, zakat allocation and share trading profit, TH recorded a distributable profit of RM2.48 billion for 2021, an increase of 2.1% from RM2.43 billion for 2020, according to a statement by TH.
TH chairman Tan Sri Azman Mokhtar, who took over the office on Dec 20 last year, commented that the fund has managed to record a good profit rate and level of assets and deposits in 2021 even though economic and market conditions have not yet fully recovered.
“Operational and financial management will continue to be managed well and carefully in order to balance between the current distribution needs and the future interests and sustainability of the congregation and depositors,” he said.
Meanwhile, TH group managing director and chief executive officer Datuk Seri Amrin Awaluddin said TH will focus on operating more efficiently and prudent spending.
“We also continue to take steps to recover investments affected by the challenging economic and market conditions resulting from the Covid-19 outbreak over the past two years,” he said.
TH said the profit distribution takes into account the zakat paid on behalf of depositors, adding that depositors no longer need to pay zakat on their savings and profit distribution received.
“This profit distribution is competitive, taking into account, among others, factors where the distribution rate for 2021 is higher than the average fixed deposit rate of Islamic banking for a period of 12 months, which is 2.36%.
“The rate has taken into account the zakat allocation of RM107 million which will be paid to all State Islamic Religious Councils on behalf of depositors,” it said in the statement.
TH noted further that the higher return for 2021 was achieved amid the challenging business environment, and the sukuk and stock market conditions last year.
“[This is in addition to] the need for TH to distribute profits prudently and sustainably according to its ability, as well as build reserve holdings to ensure that TH's financial position remains strong for the future,” it said.
Minister in the Prime Minister's Department (Religious Affairs) Datuk Idris Ahmad expressed gratitude for the competitive profit distribution relative to market rates despite TH’s investments facing difficult economic conditions amid the ongoing Covid-19 pandemic in 2021.
“This return has also taken into account the zakat paid on behalf of the depositors. Apart from receiving blessings to help Malaysians perform the Hajj, depositors also receive blessings through the zakat program arranged by TH.
“In 2021, more than 200,000 asnaf have received various assistance and benefits directly from the zakat wakalah program managed by TH,” he said.
Moving forward, TH said it will continue to further strengthen its operations, governance and financial position as the country's economic situation gradually improves after movement and business activities are allowed in stages from the third quarter of 2021, with the country's economy expected to continue to grow in 2022.
For this year, TH said it will continue its efforts to further improve its performance and governance.
“For example, almost all TH investments today are in the country. To ensure more sustainable returns, TH will diversify its investment portfolio by periodically increasing overseas investments taking into account reasonable risks,” added Amrin.
Looking ahead, TH said the country's economy is expected to continue to recover this year with the support of business and investment activities in general, but TH will take precautionary measures as there is still a risk of the emergence of new variants of the Covid-19 virus that could jeopardise the economic recovery.