KUALA LUMPUR (May 21): Bank Islam Malaysia Bhd (KL:BIMB), Malaysia's largest full-fledged Islamic bank, said on Tuesday its net profit increased 9.4% for the first quarter ended March 31, 2024 (1QFY2024) from a year earlier, mainly driven by higher net fund-based income and lower net allowances for impairment on financing. 

Net profit for 1QFY2024 stood at RM129.17 million, or 5.70 sen per share, compared with RM118.09 million, or 5.33 sen per share, a year ago, as quarterly revenue inched up 3.7% to RM1.14 billion from RM1.10 billion previously, the bank showed in a bourse filing on Tuesday.

Net fund-based income improved by 5.4% to RM528.9 million, driven by year-on-year (y-o-y) growth in financing and investment securities.

This resulted in an eight-basis-point improvement in the net income margin (NIM), reaching 2.14% for 1QFY2024, compared with 2.06% recorded in 1QFY2023. 

However, the group’s non-fund-based income decreased by RM16.5 million or 15.6% y-o-y, stemming from lower investment income during the period under review. 

The group's net allowances for impairment on financing and advances declined by 31.8% y-o-y to RM42.3 million, while total overheads for 1QFY2024 increased 4.1% y-o-y to RM371.3 million, as the group continued to invest in human capital, digital, and technology initiatives.

"The group will continue prioritising fundamentals and focusing on balance sheet discipline, as we face economic uncertainties," Bank Islam group chief executive officer Datuk Mohd Muazzam Mohamed said in a separate statement. 

"Moreover, we aim to enhance our non-fund-based income and accelerate financing growth, while expanding wealth management offerings and solidifying our position in the retail market," he added. 

As of March 31, 2024, the group’s total assets stood at RM91 billion, spurred by growth in financing and investment securities, offset by a reduction in cash and short-term funds. Net assets per share amounted to RM3.29. 

Gross financing grew by 2.4% y-o-y to RM67.8 billion, while customer deposits and investment accounts stood at RM76.4 billion. Current and savings and transactional investment accounts amounted to RM30.6 billion at the end of March 2024, constituting 40.1% of total customer deposits and investment accounts.

Looking ahead, Bank Islam anticipates improved earnings growth, as it expands its financing volume. The bank looks to manage its NIM by focusing on rebalancing the funding composition, as both of its retail and non-retail portfolios are poised to propel financing growth for the year.

"Our NIM is forecast to stabilise, supported by sustained efforts and [an unchanged] overnight policy rate," it said. 

Mohd Muazzam emphasised that customer-centricity remains a key priority for Bank Islam, particularly in leveraging digital innovations to elevate customer experience, while prioritising speed and adaptability in service offerings. 

“By adopting a comprehensive customer journey approach and refining branch offerings and processes, we aim to use digital resources to amplify technology's advantages. 

"Leveraging these resources allows the bank to foster deeper customer engagement through insights gathering and analysis. These efforts are crucial in enhancing our NIM and tailoring value propositions to meet our customers' evolving needs,” he explained. 

At Tuesday's noon market break, Bank Islam shares were unchanged at RM2.53, giving the bank a market capitalisation of RM5.73 billion. A total of 1.07 million shares were traded so far in the day.