Latest news with #SDB
Borneo Post
7 hours ago
- Business
- Borneo Post
Sabah Development Bank's losses drop significantly
— Photo from Sabah Development Bank website KOTA KINABALU (July 1): Sabah Development Bank Berhad (SDB) on Tuesday announced a significantly reduced pretax loss of RM86 million (net loss of RM82 million) for the financial year ended 2024. This marks a notable improvement from the substantial pretax loss of RM878 million (net loss of RM684 million) recorded in the previous year, primarily due to extensive provisions for Non-Performing Loans (NPLs) and diminished asset values accumulated over the past years. SDB expects to report a modest profit in FY2025. This progress reflects positive momentum in SDB's ongoing 3-Year Transformation Journey, which commenced in the second half of 2023 under a new board and management. Following a rigorous restructuring exercise, the Bank's total capital ratio had dropped to 7.9% by end 2023. However, as of end-2024, the capital ratio has rebounded to a strong 20.71%, backed by strong support from the Sabah State Government. On 4 June 2025, RAM Rating Services Berhad (RAM) affirmed SDB's debt instrument ratings at AA1/Stable/P1. The AA1 rating indicates a high safety for payment of financial obligations, while the 'Stable' outlook reflects RAM's expectations that the long-term rating will be unchanged over the intermediate term. The Bank's Commercial Papers were also affirmed at P1, the highest short-term rating assigned by RAM, reflecting high safety for payment of short-term obligations. In alignment with its mandate from the State Government, SDB is now focused on financing development projects in Sabah, predominantly in the infrastructure, power and water sectors. The State has positioned SDB as the lead lender for local-content in major investment projects, reinforcing its pivotal role in driving Sabah's economic growth. Between January 2024 to June 2025, SDB approved RM1.763 billion loan applications within its developmental mandate. During the same period, the Bank turned down RM9.646 billion in loan applications that either fell outside its mandate or did not meet its enhanced credit standards. Since the setup of an independent professional recovery team in September 2023, notable progress has been made in addressing the NPLs. The Bank's Board has approved RM965 million in settlement proposals. This is in addition to RM2 billion in pledged securities currently placed under receivership.
The Star
7 hours ago
- Business
- The Star
SDB reduces annual loss to RM86mil, targets profit in FY2025
KOTA KINABALU: Sabah Development Bank Berhad (SDB) has significantly reduced its annual pretax loss to RM86mil, down from RM878mil the previous year. In a statement on Tuesday (July 1), the bank reported a net loss for the financial year ending 2024 of RM82mil, marking a substantial improvement from RM684mil previously. This recovery is attributed to earlier provisions for non-performing loans (NPLs) and impaired assets. SDB announced that it is now on track to post a modest profit for the financial year 2025. This turnaround is part of a three-year transformation plan initiated in the second half of 2023 under a new board and management. The bank's total capital ratio, which had dropped to 7.9% by the end of 2023, has since rebounded to 20.71% as of the end of 2024 with support from the Sabah state government. On June 4, RAM Rating Services Berhad reaffirmed SDB's debt instrument ratings at AA1/Stable/P1. According to the statement, the ratings indicate a high level of safety for financial obligations and strong short-term payment capacity. SDB also highlighted a shift in lending focus towards Sabah-based development projects, particularly in infrastructure, water, and power. From January 2024 to June 2025, the bank approved RM1.763bil in financing under this mandate, while rejecting RM9.646bil worth of applications that did not meet its tightened credit standards. To address legacy debts, the bank established an independent recovery team in September 2023. As of June this year, the board has approved RM965mil in settlement proposals, with another RM2bil in pledged securities placed under receivership. The statement comes as SDB continues to rebuild investor confidence following disclosures last year about its financial position. In July 2024, the new board lodged a report with the Malaysian Anti-Corruption Commission (MACC) after discovering that nearly RM5bil — around 75% of its RM6.6bil loan portfolio — were non-performing. The bank also replaced its external auditor in September 2024, appointing Forvis Mazars PLT to succeed Ernst & Young after reporting an RM878mil pretax loss in FY2023. Since then, SDB has launched legal recovery proceedings and placed several delinquent borrowers under receivership.
Focus Malaysia
4 days ago
- Business
- Focus Malaysia
SDB's CSR Mid Valley Megamall retail store set to further empower special needs community
SELANGOR Dredging Bhd's (SDB) flagship corporate social responsibility (CSR) initiative, One-Two-Boost (OTB), has opened its first physical retail outlet at Mid Valley Megamall. It marks a major milestone in its mission to empower individuals with special needs through meaningful employment and inclusive community engagement. The store's official launch was officiated by Pathmanathan Nalasamy (left on main image) who is the director of the Development of Persons with Disabilities Department under the Department of Social Welfare Malaysia. 'The inclusion of persons with disabilities must be a shared responsibility. While the government continues to introduce policies and programmes to support their integration, it is heartening to see private sector leaders like SDB stepping up in meaningful ways,' he praised. 'Through strong public-private collaboration, we continue to build a society that values diversity, promotes dignity and ensures that no one is left behind in Malaysia's development journey.' Conceived and spearheaded by SDB managing director Teh Lip Kim herself, OTB was born out of a deeply personal desire to support and provide employment for individuals with special needs. 'What started as a small initiative has grown beyond what I imagined,' recalled Teh (second from right on main image). 'With this store, we aim to amplify OTB's true purpose – not just hy offering jobs – but raising awareness and building understanding between the special needs community and the public.' Initially launched as an online venture, OTB's expansion into a physical store reflects growing public support for its mission and the broader appeal of its holistic wellness offerings. The Mid Valley Megamall outlet showcases over 50 herbal-based products which are developed in collaboration with traditional Chinese medicine (TCM) physicians. These include herbal drinks, immunity-boosting soups, balms and other products promoting holistic well-being. More than just a retail space, the store serves as a platform for awareness, inclusion and meaningful interaction by bridging the gap between the special needs community and the wider public. Pathmanathan and Teh also expressed their gratitude to Mid Valley Megamall for supporting OTB's mission by providing a prominent platform within one of Malaysia's most visited shopping destinations. 'The impact of this store is set to be immense,' envisages Teh. 'It serves as a venue where this community can gain confidence and independence, and where every customer encounter becomes a chance to break down stigma.' Teh added that the store creates a valuable space for the special needs team to gain exposure and develop interpersonal skills while offering the public an opportunity to engage meaningfully. 'What we need is more empathy, more kindness and above all, more hope,' she stressed. 'Each product on our shelves represents not just care and craftsmanship, but also courage – the courage of this community to show up, to grow and to be seen. 'Our hope is that every customer who walks through our doors leaves not only with something good for their body but something uplifting for the heart.' Visit for Mmore information or to support this meaningful initiative. – June 27, 2025
The Star
19-06-2025
- Politics
- The Star
Shafie denies NPL write-off allegation
KOTA KINABALU: Datuk Seri Mohd Shafie Apdal strongly denied allegations that he was involved in the write-off of RM178mil in non-performing loans (NPLs) during his tenure as Sabah chief minister and Sabah Development Bank (SDB) Board of Directors' chairman. The opposition Parti Warisan president described the allegations published by an online portal as 'malicious and baseless', asserting that not a single NPL was written off under his watch. 'These accusations are outright lies, manufactured with the intent to deceive the public and destroy my credibility,' he said in a statement on Thursday (June 19). Shafie clarified that as chief minister, he had no involvement in the day-to-day operations or specific loan arrangements at the bank. 'Public institutions must be governed by professional processes, not political interference. I respected those boundaries and expected the bank's management to uphold their fiduciary duty to the people of Sabah,' he said. He slammed what he called 'calculated distortions' designed to smear him ahead of the looming state election, adding that the claim he wrote off loans to a politically connected firm, CASH Bhd, was entirely untrue. 'In fact, during my administration, I took every step necessary to recover problematic loans, not cover them up. Writing off NPLs recklessly would have been irresponsible and a betrayal of public trust,' he said. Shafie also questioned why the current Gabungan Rakyat Sabah (GRS) government, which has been in power for nearly five years, failed to launch a forensic audit or lodge reports with the Malaysian Anti-Corruption Commission (MACC) in 2021, when the issue supposedly occurred. 'If wrongdoing really occurred, why wait until now to bring it up? This is not about justice, but about politics. This is a desperate attempt to shift blame and distract from their failures,' he stressed. Shafie warned that he will not hesitate to take legal action to protect his name and integrity. 'I welcome any impartial investigation. But I will not remain silent while lies are repeated and recycled for political convenience,' he said.
Focus Malaysia
19-06-2025
- Business
- Focus Malaysia
Sabah's GRS gov't steps up accountability with RM1.97b lawsuit against global audit giant EY
THE Sabah state government under Gabungan Rakyat Sabah (GRS) is continuing to signal a firmer commitment towards transparency and accountability in managing state institutions. Towards this end, the Sabah Development Bank (SDB), one of the state's most important financial institutions, has filed a RM1.97 bil lawsuit against global audit giant Ernst & Young (EY), alleging negligence in its audit work between 2017 to 2022, sources told FocusM. According to court documents sighted by FocusM, EY is accused of failing to detect serious financial irregularities during its audits, contributing to the accumulation of more than RM2.2 bil in non-performing loans (NPLs) and substantial losses for SDB. Initiated after an internal review under the Sabah leadership, the lawsuit marks a decisive step by the GRS administration to address long-standing financial problems at the bank. The case also represents a broader effort to safeguard public funds and reinforce integrity across government-linked institutions. In its statement of claim, SDB outlined 17 key points of alleged audit negligence by EY, including: Failure to detect over RM2.2 bil in NPLs Weak internal controls and failure to identify credit risks Reliance on outdated collateral valuation reports which lead to asset misstatements Audits conducted without professional scepticism Use of 'creative accounting' to mask financial weaknesses through loan 'evergreening' practices EY is also accused of having been aware of the true extent of asset impairments since 2017 but failing to advise SDB to make appropriate provisions, allegedly to maintain a positive financial image for the bank in order to support its bond and market borrowings. Clamping down on mismanagement On July 10 last year, State Finance Minister Datuk Masidi Manjun disclosed in the State Legislative Assembly that as of May 2023, a staggering 75% of SDB's RM6.6 bil loan portfolio had turned non-performing or impaired. He revealed that the former management had engaged in 'creative accounting' whereby new loans were issued to delinquent borrowers to repay old debts, thus masking the true extent of the NPL problem. Between 2017 and 2022 alone, the previous leadership allegedly 'fabricated' RM580 mil in book profits by recycling credit and recording unpaid interest as paper gains. Worse, many loans were approved without proper due diligence, allowing unqualified borrowers to tap into public funds. The bank's bond-driven funding model also worsened its liabilities as repayments fell short of bond maturities, thus forcing SDB to borrow further just to stay afloat. While financial mismanagement of this scale would once have been quietly buried, the present administration has chosen transparency. 'Cleaning up the dirt' The move comes as part of a wider approach under Chief Minister Datuk Seri Hajiji Noor's leadership. Based on new report, several individuals, including GRS assemblymen, are expected to be charged in court soon over alleged misconduct involving state-issued mining licenses. Throughout that investigation, the Sabah state government has publicly committed to giving full cooperation to the Malaysian Anti-Corruption Commission (MACC) with no political interference. The MACC has since clarified that the Chief Minister was not among those under investigation, and enforcement officials acknowledged the state's openness during the probe. Together, these developments point to a shift in Sabah's political and administrative culture that prioritises public accountability over political convenience. In SDB's case, EY was continuously appointed as external auditor by the previous state governments. However, it was only after the GRS government took over the state administration and new management was appointed at SDB that the true scale of the losses was uncovered. Since assuming oversight of SDB in mid-2023, the GRS administration has taken steps to overhaul the bank's governance. The bank was formally placed under the Chief Minister's Incorporation and the State Treasury with the new board launching sweeping reforms. These include a full internal audit, re-classification of loans in line with Bank Negara Malaysia (BNM) standards and legal action against 43 NPL borrowers. Professional recovery agencies have been engaged with the board targeting the recovery of RM1 bil in NPLs annually over three years. In the first year alone, SDB recovered RM1.9 bil in legacy loans from government-linked companies (GLCs) while reducing the bank's bond obligations from RM5 bill to RM3.3 bil. In early 2024, SDB rejected RM1.5 bil worth of new loan applications after stricter credit reviews, signalling a renewed focus on financial discipline. Very broadly, this lawsuit sends a clear message that even large corporate players will be held accountable if public interests are harmed. It also underscores the expectation that auditors, banks and other state-linked entities must meet higher governance standards going forward. Looking ahead, the GRS-led government is expected to pursue further improvements to financial oversight across state agencies and government-linked companies. The ultimate aim is to prevent a repeat of past failings, ensure stronger protections for public funds and build public confidence in Sabah's key institutions. As the state continues to focus on economic development, job creation and investor confidence, this latest move shows that governance reforms remain a key part of the agenda. – June 19, 2025 Main image credit: Sabah Development Bank's website
