RHB Bank Q1 earnings up 6.7% to RM630.2mil

KUALA LUMPUR: RHB Bank Bhd’s net profit for the first quarter ended March 31 came in 6.7% higher year-on-year (yoy) to RM630.2mil from RM590.82mil due to lower expected credit losses on loans and other financial assets and lower operating expenses.

Revenue rose 7.1% to RM3.35bil from RM3.12bil in the same period a year ago. Its earnings per share for the quarter stood at 15.72 sen against 14.73 sen previously. 

In a statement Monday, RHB said its gross  fund based income increased by 8.5% yoy on the back of a 5.6% increase in gross loans and financing. Funding and interest expense was 18.3% higher mainly due to the full impact of the deposit cost when OPR was increased towards the end of January 2018.

The bank said competition for deposits had remained keen for the year and resulted in net fund based income decreasing by 2.2% to RM1.2bil with a lower net interest margin (NIM) of 2.16% for the quarter compared with 2.28% a year ago.

Non-fund based income was stable at RM534.0mil, contributed largely by higher capital market fee income and insurance underwriting surplus.

RHB’s operating expenses declined by 1.9% to RM846.3mil from a year ago driven by lower personnel costs and IT-related expenses. Cost-to-income (CIR) ratio improved to 48.6% from 48.8% a year ago.

The bank said its allowances for credit losses was at RM72.9mil, 36.4% lower than the previous year, primarily due to lower allowances for loan impairment and higher write-back in losses for financial securities. Annualised credit charge ratio improved to 0.22% compared with 0.26% over the same period last year.

Total assets of the gGroup increased by 2.5% from December 2018 to RM249.3bil as at March 31. Shareholders’ equity stood at RM24.4bil, with net assets per share at
RM6.08.

Its common equity tier-1 (CET-1) and total capital ratio after final dividend stood at 15.67% and 19.02% respectively.

The group’s gross loans and financing grew by 5.6% year-on-year to RM170.1bil, supported mainly by resilient growth in mortgages and SME while Singapore grew loans by 8.2% yoy. 

RHB’s domestic loan market share stood at 9.1% as at end March 2019.

Customer deposits increased by 9.5% to RM186.9bil, contributing to a healthy liquidity coverage ratio of 155.3%. Total current and savings account (CASA) composition stood at 24.5% of total deposits.

Gross impaired loans ratio improved to 2.12% from 2.29% a year ago with gross impaired loans at RM3.6bil as at March 31.

“We continue to be prudent in loan loss provision with loan loss coverage standing at 106.3% as at end March 2019,” RHB said.