BIMB Holdings Berhad 1999 Financial & Business Analysis "A strong recovery and sharply higher profits in a more positive economic environment."

Financial Trends

Ownership and Legal Status
The principal activity of the Company, which, with all its subsidiaries, is incorporated in Malaysia, is to act as an investment holding company with business transacted in accordance with Islamic principles. The Company's direct subsidiaries are Bank Islam Malaysia Berhad (100%) which, with its subsidiaries, undertakes Islamic banking, unit and other trust management and nominee services; Syarikat Takaful Malaysia Berhad (74.25%) undertaking Takaful business and BIMB Securities (Holdings) Sdn. Bhd. (100%), providing stock broking and investment management services.

The Year in Brief
At Group level, profit before zakat and taxation was sharply ahead by 333% to RM102.41 million (1998: RM23.64 million). Operating income increased by 13.22% to RM286.15 million (1998: RM252.75 million). Group profit after zakat, taxation and minority interest increased to RM87.39 million compared with RM9.32 million in 1998, while earnings per share increased to 15.6 sen from 2.2 sen in 1998. Expenses were well controlled at RM183.744 million, 19.8% lower than the 1998 figure of RM229.102 million. Personnel expense was flat at RM63.620 million (1998: RM63.062 million). Expenses as a percentage of total income were 64.21% (1998: 90.65%).

Bank Islam Malaysia Berhad (BIMB), the core subsidiary of the Company, is the largest contributor to Group profits, accounting for 46.8% of total profits, followed by Syarikat Takaful Malaysia Berhad at 23.7%.

Business Highlights

Gross income at BIMB increased by 9.49% to RM195.01 million (1998: RM178.11), largely as a result of more efficient utilisation of funds, increase in deposits and reduction in financing losses. The 8% credit growth requirement set by the BNM was achieved.

Deposits from customers increased by 51.08% to RM5.62 billion (1998: RM3.72 billion), while total financings rose 15.5% to RM3.40 billion (1998: RM2.95 billion).

In spite of difficult economic conditions, BIMB continued to add products and services during the year, including Sakinah Investment Account; Pewani Savings Account; Ar-Rahnu Financing Scheme; Machinery/Equipment Financing Scheme; New Vehicle Financing Scheme; Education Financing Scheme and Official Zakat Payment Receipt. Islamic banking products and services now total 44. The upgrade of Management Information Systems shortly to be completed will provide BIMB with the world's first Total Islamic Banking Solution (TIBS).

On the Takaful side, the economic downturn did not markedly affect Syarikat Takaful Malaysia Bhd. (STMB), where revenues increased by 11.55% to RM81.30 million (1998: RM72.88 million). This increase is attributed to increases in total gross contributions under General and Family Takaful business.

On the Capital Markets side, the BIMB Securities Group made a profit before zakat and taxation of RM5.13 million (1998: loss of RM9.18 million).

Looking to the future, the Bank will continue its rigorous strategy to expand its deposit base. With the economy recovering and with the Government's directive on financing growth and the need to expedite disbursements, the Bank expects to increase its financing activities, particularly in the sectors of low and medium cost housing and small and medium sized industrial enterprises.