KUALA LUMPUR: Bank Negara Malaysia said the profitability of the banking sector improved further in 2010, largely driven by higher net interest income and lower provisioning for impairment.
In its Financial Stability and Payment Systems Report issued on Wednesday, March 23 BNM said banks pre-tax profit rose 33.9% to RM22.76 billion in 2010 from RM16.99 billion in 2009.
It said interest income rose 16.4% to RM65.64b in 2010 from RM56.36b in 2009.
It said pre-tax profit/average assets (%) rose to 1.1 in 2010 from 1.2 in 2009 pre-tax profit/average employee increased to RM191,800 from RM148,500. Cost incurred per ringgit of net interest income improved to 69.3 sen in 2010 from 69.4 sen in 2009.'' Overheads to staff cost declined to 108.5% in 2010 from 110.2% in 2009.
BNM said the banking sector remained well-capitalised, reinforced by the high quality of capital, which is predominantly in the form of common equity and reserves.
The aggregate risk-weighted capital ratio (RWCR) and core capital ratio (CCR) were 14.8% and 13.0% respectively, well above the current regulatory minimum levels, as well as the higher requirements under Basel III.
Similarly, the insurance and takaful sectors registered stronger results backed by sustained demand for savings and protection products and the improved performance of the equity market.
The capitalisation of the insurance industry remained strong with a capital adequacy ratio(CAR) of 224.6%. The risk-bearing capacity of the financial system to withstand extreme macroeconomic and financial conditions was reaffirmed by stress tests carried out on the banking and insurance sectors, at both the aggregate and institutional levels.
BNM said the Islamic banking system continued to remain resilient throughout 2010, supported by high
capitalisation, improved asset quality and sustained profitability in an environment of ample liquidity.
In its Financial Stability and Payment Systems Report issued on Wednesday, March 23 BNM said banks pre-tax profit rose 33.9% to RM22.76 billion in 2010 from RM16.99 billion in 2009.
It said interest income rose 16.4% to RM65.64b in 2010 from RM56.36b in 2009.
It said pre-tax profit/average assets (%) rose to 1.1 in 2010 from 1.2 in 2009 pre-tax profit/average employee increased to RM191,800 from RM148,500. Cost incurred per ringgit of net interest income improved to 69.3 sen in 2010 from 69.4 sen in 2009.'' Overheads to staff cost declined to 108.5% in 2010 from 110.2% in 2009.
BNM said the banking sector remained well-capitalised, reinforced by the high quality of capital, which is predominantly in the form of common equity and reserves.
The aggregate risk-weighted capital ratio (RWCR) and core capital ratio (CCR) were 14.8% and 13.0% respectively, well above the current regulatory minimum levels, as well as the higher requirements under Basel III.
Similarly, the insurance and takaful sectors registered stronger results backed by sustained demand for savings and protection products and the improved performance of the equity market.
The capitalisation of the insurance industry remained strong with a capital adequacy ratio(CAR) of 224.6%. The risk-bearing capacity of the financial system to withstand extreme macroeconomic and financial conditions was reaffirmed by stress tests carried out on the banking and insurance sectors, at both the aggregate and institutional levels.
BNM said the Islamic banking system continued to remain resilient throughout 2010, supported by high
capitalisation, improved asset quality and sustained profitability in an environment of ample liquidity.
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