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Saturday, 8 September 2007

Islamic Banking Sector in Malaysia Remains Well Capitalised

KUALA LUMPUR, Sept 7 (Bernama) -- The Islamic banking sector remains well capitalised with the capital base increasing to RM14.7 billion and a risk-weighted capital of 17.1 percent as at end-June this year.Its pre-tax profit grew by 32.9 percent to RM1 billion in the first six months of this year, driven by growth in income from financing, trading and investment and higher recoveries on non-performing assets.According to the Economic Report 2007/2008 released by the Finance Ministry Friday, the annualised return on assets and return on equity stood at 1.6 percent and 16.1 percent respectively.It says the quality of financing continues to improve with net non-performing financing based on three-month classification declining by 8.3 percent to RM3.2 billion to account for 4.1 percent of total financing.During the first six months of this year, total assets of the Islamic banking sector expanded by eight percent to RM143.7 billion compared with RM133 billion as at end-2006.The ministry says Islamic banking lending remains highly concentrated on the household sector with RM51.7 billion or 63.5 percent of total outstanding loans as at end-June 2007, mainly for the purchase of passenger cars and residential properties.On the takaful industry performance, the Finance Ministry says the industry grew strongly with combined takaful contribution income increasing by 36.2 percent to RM1.2 billion, accounting for 8.1 percent of the total premiums of the insurance industry as at end-June this year.
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