Strong demand for Islamic banking underpins growth at HSBC Bank Malaysia Berhad

Pre-tax profit at HSBC Bank Malaysia Berhad for the nine months ending September 30th was 18.6 per cent higher than in the corresponding period last year.

Pre-tax profit at HSBC Bank Malaysia Berhad for the nine months ending September 30th was 18.6 per cent higher than in the corresponding period last year.

Profit before tax for the period rose to MYR 1,193m [Malaysia Ringgit] (£242.27m), MYR 187m (£37.98m) more than in the same period in 2011.

Operating income grew to MYR 2,267m (£460.45), an increase of 9% compared to the corresponding nine months in 2011. This was mainly due to higher income from Islamic banking operations of MYR425m (£86.30) and increase in net interest income.

Growing demand for Islamic banking

The robust growth rate in income from Islamic Banking Operations was driven by strong growth in net financing income and Islamic trading profits. The strong momentum and interest in Islamic Banking in the local and international financial industry, coupled with the bank's investments in domestic network coverage, supported the expansion of Islamic income.

Net interest income grew because the size of the average loan and financing base increased and net fee income improved from increased corporate finance related fees.

Loan impairment charges and other credit risk provisions increased marginally by MTYR6m (£1.22m). The cost efficiency ratio for the nine months ending September 30th improved to 39.7% from 43.3% for the same period in 2011.

Total assets at September 30th were MYR77.6bn (£15.76bn), slightly lower than the MYR79.9bn (£16.22bn) at December 31st 2011. The bank said that the decrease was mainly due to lower deposits and placements from banks and financial institutions.

Mukhtar Hussain, Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad, commented: "We recorded a strong increase of MYR187m, or 18.6%, in profit before tax for the first nine months of 2012 by continuing to expand our Malaysian business, and the prudent management of overheads, which created organic growth across all business lines.

"Malaysia's GDP growth for 2012 continues to be spurred by robust domestic and private consumption, effectively mitigating against negative spillovers from weaknesses in the external environment. The government's efforts through the Economic Transformation Programme as well as the Government Transformation Programme have contributed to sustainable economic growth within the country.

"We continue to remain optimistic about the Bank's prospects in Malaysia and are committed to investing and contributing positively towards the economic and financial development of the country."

HSBC Group has a market capitalisation of £118,801m. The share price was down 0.28% to 2,481p at 09:25 on Wednesday morning.

MF

Recommended

Too embarrassed to ask: what is short selling?
Too embarrassed to ask

Too embarrassed to ask: what is short selling?

Short sellers are often accused of unfairly driving share prices down to make a quick buck. But short selling is a perfectly legitimate – if risky – t…
26 Jan 2021
Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020

Most Popular

Bitcoin does consume a lot of energy – but here’s why it’s worth it
Bitcoin

Bitcoin does consume a lot of energy – but here’s why it’s worth it

Some people question bitcoin’s legitimacy because it uses huge amounts of electricity to maintain its network. But that’s not a failing, says Dominic …
27 Jan 2021
Joe Biden’s spending spree will lift American spirits and markets – but it comes with a sting in the tail
US stockmarkets

Joe Biden’s spending spree will lift American spirits and markets – but it comes with a sting in the tail

New US president Joe Biden is planning to throw trillions of dollars in stimulus at his country’s economy. Markets will love that. But it comes with a…
25 Jan 2021
Think Tesla is a bubble? This might be the best way to bet on it bursting
Oil

Think Tesla is a bubble? This might be the best way to bet on it bursting

The huge rise in Tesla’s share price means that, by market value, it’s now the sixth-largest company in the US and and the world’s biggest car-maker. …
25 Jan 2021