KUALA LUMPUR, 5 April, 2019: Lembaga Tabung Haji (TH) which completed its financial restructuring last December with the strong support from the Government, has turned around with total asset surplus of RM1.0 billion for the financial year ended 31 December 2018. In comparison, TH had reported total asset deficit of RM4.1 billion in 2017 based on the audited financial statements.

As at 31 December 2018, TH’s total assets stood at RM76.5 billion, which are in excess of its liabilities of RM75.5 billion. Income for the year was RM4.2 billion while distributable profit came to RM2.0 billion.

Despite the restructuring, TH had to recognise RM1.5 billion impairment, some of which should have been provided in the previous financial year. This had the effect of reducing TH’s distributable profit.

With the 2018 financial results meeting the two pre-requisites: (i) generate distributable profit, and (ii) assets in excess of liabilities, TH is in a position to declare hibah in full compliance with the Tabung Haji Act 1995 (TH Act).

Minister in Prime Minister’s Department, Datuk Seri Dr Mujahid Yusof, who announced the results at a media conference today, also declared a hibah of 1.25%, amounting to RM913 million, for all depositors for 2018.

He said: “The successful completion of the restructuring plan reflected the Government’s determination to rescue TH to protect the interest of 9.3 million depositors.

“In delivering this commitment, the Government will allocate RM500 million in 2020 and subsequently RM1.73 billion per year until all Sukuk is redeemed.

“Total allocation from the Government for the 10 years is estimated at RM17.8 billion. This is due to poor governance and mismanagement in the past. Manipulation of account was done to distribute high hibah despite the growing deficit.

“Moving forward, the Government is committed to ensure transparency in TH’s operation and financial performance. InsyaAllah, I’m very confident with TH’s new management team, TH will be back on a strong footing to fulfill its mandate for Muslims in Malaysia, and to remain as the most reputable Islamic financial institution in the world,” he added.

Dato’ Sri Zukri Samat, TH’s Group Managing Director and Chief Executive Officer who was appointed in July last year, said in the review of the 2018 performance, that TH’s financial recovery in a short period of six-months was due to the Government’s full support for it’s financial restructuring to clean up its balance sheet.

“This involved the transfer of a basket of under-performing assets to the Government-owned Special Purpose Vehicle (SPV) called Urusharta Jamaah Sdn Bhd (UJSB).”

“This basket of under-performing assets, had a book value of RM9.7 billion, but they were transferred to UJSB at RM19.9 billion, to enable TH to cover the deficit of RM10.9 billion sitting on the balance sheet.”

“The transfer will be settled via RM19.6 billion Sukuk and RM300 million in cash”

“The financial restructuring has enabled us to achieve two things – close the deficit, and restore the balance sheet to normal footing.”

“We are confident TH’s performance would be better for 2019. With a stronger balance sheet and all the impairments out of the way, TH is now on a stable footing to generate sustainable profits for hibah distribution in full compliance with the TH Act,” he added.

Moving forward, TH’s plan would focus on sustainable revenue generation to secure returns that would enable TH to continue to focus on its mandate of helping Muslims to save and prepare for their Hajj pilgrimage.

Some of the key initiatives under this plan are to increase accountability and transparency with quarterly financial reporting as well as to provide a more sustainable hibah distribution through Hibah Equalisation Reserve (HER), which has just been set up.

Depositors can check their latest account balance after TH 2018 annual hibah distribution starting from Monday, 8 April 2019.

-End-

05042019_PRESS RELEASE - HIBAH 2018.pdf