20/10/2011 (The Star) - Agrobank is aiming for a 15% to 20% year-on-year growth in net profit for the current financial year ending Dec 31, 2011 (FY11), said president and chief executive officer Wan Mohd Fadzmi Wan Othman.

“This would come from organic growth. We are doing relatively well and are happy with our loans growth this year,” he said during a media briefing.

For this year, the bank is expecting a loans growth of around 7%, driven partly by its encouraging Islamic financing expansion of 10% to 15%.

In 2010, Agrobank enjoyed a 110.7% year-on-year jump in net profit to RM375.9mil, which was the bank's best financial performance since it was corporatised in April 2008.

The bank's net income increased to RM786.5mil compared with RM639.6mil in FY09.

Agrobank, formerly Bank Pertanian Malaysia, had attributed its higher performance last year mainly to improvements in financing and investment operations, lower allowances for bad and doubtful debts and higher gains on disposal of investments.

Wan Mohd Fadzmi, who was appointed on July 1, said the bank had recently undergone a restructuring exercise in terms of its operating structure.

“For instance, the 12 state officers have been reduced to only eight regionals, reporting to a single chief.

“This is to rationalise the reporting structure, and will hopefully translate to better business performance.

“A new credit management division was also set up to segregate business origination and independent credit valuations.

“We are also beefing up our human resource division and looking at the way we renumerate our people,” he said.

The development financial institution is also aiming to become a fully-fledged Islamic agriculture bank by 2015, a move which would synergise with the bank's business model.

“This is because agricultural financing tends to be long term.

“We operate in rural and semi-rural areas where most of the constituents are Muslims,” he said.

He reiterated that the bank would continue to support the agriculture sector.

“Oil palm is the sector where we have the highest exposure, in excess of 25%.

“Oil palm is a good anchor for us as it gives us a stable source of revenue.”

Currently, the bank has 176 branches with plans to open two more by the end of 2011 and another eight next year.

“We want to provide our services in the under-served and un-served areas for maximum impact,” he said.