KUALA LUMPUR - Malaysia's Muslim pilgrimage fund Tabung Haji, which was bailed out by the government in December, recorded net profit of RM440 million (S$144.5 million) for its first quarter ended March 31, on revenue of RM623 million.
The fund, which is close to the hearts of Malaysian Malay-Muslims, said on Monday (May 13) that it recorded sustained performance following the successful completion of the "restructuring and rehabilitation" of its balance sheet, The Star reported on its website.
The performance of Tabung Haji is closely watched, as it is the main savings vehicle for most Malaysian Muslims as they store money to go for the pilgrimage in Saudi Arabia.
The Pakatan Harapan government formed a special purpose vehicle in December to take over as much as RM19.9 billion of Tabung Haji's underperforming assets, thus allowing the fund to start on a clean slate and enable it to pay out dividends to finance haj journeys.
Tabung Haji last month paid a dividend of 1.25 per cent to its 9.3 million depositors for the financial year 2018, the lowest in its 56-year history.
It had paid out a 4.5 per cent dividend in 2017. But the PH government said this dividend was actually paid using money placed by new depositors, as the fund's assets have sharply depreciated over the years, but that this was kept hidden by the previous government.
Malaysia sends more than 22,000 people for the annual haj pilgrimage. Tens of thousands more travel to the holy cities of Mecca and Medina in Saudi Arabia throughout the year.
Tabung Haji said in its statement on Monday that its financial position was strengthening, with assets exceeding liabilities by as much as RM1.20 billion, The Star said.
The fund's performance was supported by improved portfolio investments as well as an overall healthy quality of assets after the impairment was made in December 2018.
Tabung Haji invests in equities, fixed income, properties and palm oil plantations.
There was a concern that news of its asset impairment and low dividends would scare off people from continue to save at Tabung Haji.
But it said on Monday that in the first quarter, more than 91,000 new saving accounts were opened, increasing the total number of depositors to 9.3 million.
"As an institution that helps Muslims save for the haj, the fund management operations remained smooth without any interruption during the quarter," it said.
The fund recorded new savings of RM4.3 billion while withdrawals accounted for RM4.6 billion.