Friday, September 9, 2011

BIMB ... Sep11

BIMB Holdings Bhd, owner of the country's oldest Islamic bank, bucked the banking trend to show enviable growth in net income margin (NIM) in the second quarter of the year.

The bank's NIM may have expanded close to 20 basis points to about 3.58 per cent from first quarter of 2011 due to a "very liquid" balance sheet that gave it more flexibility than other banks.

BIMB's low financing/deposit ratio of just 54 per cent (which improved from 51 per cent in the first quarter) gives it greater flexibility in managing its NIMs.

BIMB’s offer is a turnaround story of what is now a well-capitalised commercial bank (15.6 per cent core capital ratio) with a very liquid balance sheet (net financing/deposit ratio of just 54 per cent), a well-managed and profitable composite insurance outfit as well as a potential M&A (merger and acquisition) story, given the possibility of shareholding changes.

The group's plan - to expand into the region - is not a priority at this point in time. The banking unit, Bank Islam Malaysia Bhd, has often talked about wanting to expand into markets, like Indonesia and Bangladesh to tap Islamic finance.

BIMB saw financing growth of 8 per cent for the year to date, or 16 per cent on an annualised basis, led by growth in personal financing.

Its insurance arm Syarikat Takaful saw strong earnings, with first half pre-tax profit more than doubled from a year ago, due to a 65 per cent jump in transfers from the family takaful fund.

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