SHAH ALAM - Bank Islam Malaysia Berhad (Bank Islam or the Group) has reported a net profit of RM253.0 million for the first half of 2025 (1H2025), marking a 5.9 per cent year-on-year (y-o-y) decline compared to the same period in 2024.
The dip was mainly attributed to higher overheads, as well as increased net allowance for impairment and finance costs. The Group’s total overheads expanded 10.6 per cent to RM830.8 million, reflecting continued investment in human capital, digitalisation and technology initiatives.
Net allowance for impairment on financing and advances also rose by 57.6 per cent, largely driven by an increase in net new impaired financing. Consequently, financing credit cost increased to 0.35 per cent.
Nonetheless, Bank Islam maintained strong asset quality, with its gross impaired financing ratio at 1.05 per cent as of June — significantly lower than the industry average of 1.42 per cent.
The Group recorded a 9.9 per cent y-o-y increase in total net income, amounting to RM1.4 billion, underpinned by a 66.5 per cent surge in non-fund-based income to RM291.9 million.
This growth was driven by stronger fee and commission income, improved gains from the sale of investment securities and higher income from foreign exchange transactions.
Fund-based income also rose 4.9 per cent y-o-y to RM2.2 billion, supported by growth in financing and investment securities. This contributed to a 7.0 per cent expansion in total assets, which reached RM99.5 billion at the end of June. Net assets per share stood at RM3.50.
Gross financing climbed 6.4 per cent y-o-y to RM72.5 billion, led by contributions from both Group Retail Banking (5.7 per cent growth) and Group Institutional Banking (8.7 per cent growth).
Customer deposits and investment accounts also grew by 5.4 per cent y-o-y, closing at RM82.7 billion. Current, savings and transactional investment accounts (Casatia) amounted to RM29.1 billion, making up a healthy 35.2 per cent of the total.
As a result, net fund-based income posted a modest growth of 0.6 per cent to RM1.1 billion. Earnings per Share (EPS) stood at 11.16 sen, while annualised Return on Equity (ROE) came in at 7.1 per cent. The Group’s Total Capital Ratio remained strong at 20.3 per cent.
Commenting on the Group’s performance, Bank Islam Group Chief Executive Officer (CEO), Datuk Mohd Muazzam Mohamed, said that despite a challenging operating environment, the Group continues to achieve resilient financial performance, highlighting its agility and disciplined approach in navigating the heightened competition in the financial sector.
“The Group is in a transitional phase, streamlining operations, removing redundancies and consolidating resources to improve efficiency. Alongside these measures, Bank Islam has continued to invest strategically in technology, infrastructure and innovation to future-proof the business.
“Enhancements to digital platforms and the modernisation of operational capabilities are aimed at building resilience, improving service delivery and positioning the Group to capture new opportunities in a fast-changing financial landscape,” he said.
Bank Islam highlighted that delivering shareholder returns remains a priority, but equally important is ensuring customer value through operational excellence.
Muazzam also mentioned that, as Bank Islam concludes its five-year strategic roadmap (LEAP25) this year, the Group has taken the opportunity to reflect on its journey, drawing lessons and identifying critical areas for improvement.
“These insights provide a strong foundation for the next phase of growth, as the Group refines its strategies, strengthens its business focus and delivers sustainable value to customers and stakeholders.
“This transition also aligns with the aspirations of the 13th Malaysia Plan (RMK-13) and Malaysia’s Financial Sector Blueprint 2022-2026, where the Islamic financial industry is recognised as a catalyst for economic diversification, innovation and inclusive growth,” he said.