PETALING JAYA: Bank Rakyat has announced a 15% dividend for its financial year ended Dec 31, 2021 (FY21) compared to 13% in its previous financial year.

       This will involve a payout of RM429.50mil and the dividend will be credited to 827,066 members from April 25, 2022.

       Entrepreneur Development and Cooperatives Minister Tan Sri Noh Omar said despite the challenging environment triggered by Covid-19, Bank Rakyat was still able to maintain a double-digit dividend rate for 23 years.

       “This achievement is testimony of Bank Rakyat’s commitment to realise the mandate entrusted to strengthen the economic well-being of its members and customers,” he said at a press conference yesterday.

       Noh said Bank Rakyat was always concerned about the needs of its members, of which 30% were made up of individual recipients from the bottom 40 (B40) group, while 20% were cooperative recipients from the B40 group.

       The group recorded higher profit before tax and zakat (PBTZ) of RM1.63bil for FY21 compared to RM1.44bil in the previous year.

       The group said higher PBTZ was achieved through its fundamental strength and focus on its core activities, despite the economic uncertainties caused by the Covid-19 pandemic.

       The group contributed 2% of its PBTZ amounting to RM32.30mil to cooperative education trust fund and 1% or RM16.15mil to the cooperative development provident fund.

       Bank Rakyat building

       The total contribution to these cooperative funds for the year 2021 amounted to RM48.45mil.

       Meanwhile, the group’s net profit for FY21 saw an increase to RM1.86bil compared to RM1.38bil in the previous year.

       The higher net profit is said to be contributed by the lower deferred tax liability during the year.

       The group said its financing and investment activities and lower funding costs attributable to the low overnight policy rate helped its FY21 results.

       “In addition, the lower provisioning during the year, in line with the industry trend has also boosted the group’s performance,” it said in a statement.

       The group’s net operating income rose 3.2% to RM3.52bil for FY21 compared with RM3.41bil in FY20 due to the lower cost of fund from effective assets liability management, and higher Current Account-i and Savings Account-i (CASA) of RM9.23bil from RM8.28bil previously.

       According to Bank Rakyat chairman Datuk Abd Rani Lebai Jaafar, the group’s cost to income ratio is below 40% due to its effective cost management activities, lower than the industry’s average of 46%.

       “The group continued to be the most profitable cooperative bank, as well as the second largest Islamic financial institution in Malaysia in terms of profitability,” it added.

       In terms of total assets, the group saw a growth of 3% or RM3.31bil to RM115.06bil in its FY21 compared with RM111.75bil in the previous year.

       The group said the growth was in line with its strategy throughout the year including growth in financing balance of 1.6% and growth in treasury assets by 7.0%.

       Meanwhile, return on assets improved to 1.4% in FY21 from 1.3% in FY20, in line with the industry trend.

       Despite the slow-down of financing activities throughout the year caused by the pandemic, the group’s financing grew 1.6% or RM1.21bil to RM77.30bil in FY21 compared with RM76.08bil in the previous year.

       The group posted a strong growth of 13.5% in home financing to RM7.82bil from RM6.90bil while business banking segment recorded growth of 3.4% to RM6.00bil, from RM5.80bil previously as it continues to diversity its financing portfolios.

       This is in line with the group’s long-term plan to support its small and medium enterprise segment.

       “The group’s asset quality has improved during the year with the gross impaired financing ratio recorded at 1.70%, as compared to 1.94% previously,” it said.

       “At the same time, financing loss coverage ratio improved further to 196.70% from 158.2% previously, in line with the industry’s prudent measure to have sufficient buffer for potential defaults post moratorium period,” it added.

       In terms of deposit balances, the group’s deposits including CASA and term deposits improved by 1.1% or RM0.95bil to RM86.52bil in FY21 compared with RM85.58 in FY20.

       Due to aggressive cash management activities and continuous promotion throughout the year, CASA ratio improved to 11.1% for FY21 from 10.2% in FY20.

       Moreover, the group’s shareholders fund increased by 3.4% or RM0.77bil to RM21.22bil in FY21 compared with RM20.95bil in FY20 as it recorded a higher net profit during the year.

       As at Dec 31, 2021, the group’s risk-weighted capital ratio and core capital ratio after the proposed final dividend remained strong at 24.22% and 21.81% respectively.

       According to the group, this is well above the minimum regulatory requirements and the industry average.

       The group noted to focus on its mandated role as well as the new growth areas, in order to create long-term value to its members.

       Abd Rani said currently, Bank Rakyat’s strategic plan 2025 (BR25) is in the implementation phase and in 2021, all the 46 programmes planned had been executed according to the plan.

       “These achievements include the establishment of ten small and medium enterprise business and cooperative centres which are currently operating throughout the country, including in Sabah and Sarawak.

       “Besides, Bank Rakyat has also launched the iRakyat mobile banking application which is one of the key achievements of the digitalisation action plan through BR25,” he said.