SME Bank Recorded Healthy Financial Performance for 2015
KUALA LUMPUR, 30 June 2016 – SME Bank continues to deliver its mandate of nurturing and developing the country’s SMEs when its financing portfolio recorded a double digit growth or RM5.4 billion said Datuk Mohd Radzif Mohd Yunus, the Group Managing Director in a statement following the 2015 financial announcement of SME Bank.
Datuk Mohd Radzif added, “The three largest financing portfolios by industry were Wholesale & Retail Trade, and Restaurants & Hotels at 26.1%, Manufacturing at 17.1%, and Education, Health & Others at 16.5%. Our performance is in line with the performance of the SMEs industry which recorded a growth of between 5% to 6% in 2015 despite facing various economic challenges. This was largely due to the continued strength of private domestic demand and to a lesser extent from the turnaround in net exports.”
The value-added growth of SMEs across all sectors of the economy outperformed the overall sector. Consequently, SMEs’ contribution to overall Gross Domestic Product (GDP) increased significantly to 36%. Financing to SME grew by 15% in 2015 from 13.3% in 2014: the services sector represented 65.3% of financing exposure followed by manufacturing and construction at 15.6% and 12.2% respectively.
On the back of these positive trends, SME Bank recorded a healthy financial performance in 2015 with the operating profit reaching RM76 million. Profit before tax increased to RM50.1 million, 71% higher than the previous year, due to among others, improved account and development management. Meanwhile, gross income from Islamic Banking business stood at RM273 million, recording an 11% increase from the previous year, reflecting the Bank’s increasing Islamic financing portfolio.
Playing the role of nurturing the SMEs more effectively, SME Bank undertakes various intervention programmes to help bring the SMEs to the next level. Each year, the Bank targets a group of customers who are ready and capable to expand their businesses and take them to a higher level. In 2015, 270 customers successfully migrated upward after fulfilling the predetermined criteria.
The Centre for Entrepreneur Development and Research Sdn. Bhd. (CEDAR), SME Bank’s wholly owned subsidiary was also active in conducting various development programmes that are tailored to individual SMEs’ stages of growth and address their requirements and needs. In 2015, CEDAR successfully trained more than 12,000 participants using their flagship programmes which include the Leaders Entrepreneurship Acceleration Programme (LEAP) and the various fund based programmes. Another notable achievement is the Entrepreneur Premises Programme (EPP) which recorded an 85.5% occupancy rate. Six tenants graduated from the programme and moved their operations to their own premises.
Customers’ engagement also continued to be a top priority in 2015 for SME Bank. A series of nationwide SME Bank Group Outreach and Biz Talk 2015 programmes were rolled out until the third quarter of the year. A total of 2,400 SME entrepreneurs participated in the 11 sessions at the selected locations throughout the country. Participants were given information on the Bank’s new and existing programmes, clinic sessions, motivational talks and engagement sessions.
For 2016, SME Bank is expected to continue playing a dominant role in supporting and nurturing SMEs through its various Outreach programmes, which among others include the SME Bank Xcess 2016. The programme attracted approximately 1,200 SME entrepreneurs. In addition, SME Bank is also having a regional based Outreach programmes with the objective of reaching a wider group of SME entrepreneurs.
SME Bank’s commitment in assisting SMEs to grow and remain competitive have been recognized internationally by the Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) in Apia, Samoa on 2 May 2016 when it received the awards for Outstanding Development Project for the Graduate Entrepreneur Fund (TUS) and Best Sustainability Report 2014. Datuk Mohd Radzif also received the Outstanding CEO Award 2016 from ADFIAP.