KUALA LUMPUR: RHB Bank Bhd's earnings rose 4.9% to RM1.49bil in the nine months ended Sept 30, 2017 mainly due to lower impairment losses on other assets and higher net funding income.
The banking group said on Monday the higher earnings compared with RM1.42bil in the previous corresponding period was partially offset by lower non-fund based income, higher overheads and higher loan loss impairment.
RHB Bank's revenue slipped 1.78% to RM7.86bil from RM8.01bil during the nine-month period.
Its net fund based income increased by 5.2% to RM3.39bil mainly due to loans growth and lower interest expense from prudent funding cost management and redemption of sub-debts and senior notes in the second quarter of the period. This has resulted in net interest margin to stabilise at 2.19% over the last two quarters.
Non-fund based income fell 10.9% to RM1.32bil mainly due to lower net foreign exchange gain, lower commercial/investment banking fee income, lower trading and investment income and lower insurance underwriting surplus.
This was partially offset by an increase in net wealth management fee income and higher brokerage income in line with better trading volumes.
RHB Bank said operating expenses rose by 2% to RM2.34bil on-year due to higher personnel costs and higher IT-related expenses as it continued to invest into technology infrastructure and capabilities.
It also reported an improved cost to income ratio at 49.6%, from 50% for financial year 2016.
“Allowances for impairment on loans and financing was higher at RM312.6mil, primarily due to higher collective impairment, partially offset by lower individual impairment. Annualised credit costs for the first nine months of 2017 was at 26 basis points.
“Impairment losses on other assets for both years were primarily provided for corporate bonds in Singapore, reflecting market developments in the oil and gas industry,” it said.
For the third quarter, its earnings fell 3.2% to RM488.83mil from RM505.32mil.
RHB Bank said there was higher allowance for impairment on loans, financing and other losses of RM109.34mil compared with RM76.94mil.
Its earnings per share were 12.20 sen compared with 12.60 sen. Its revenue was RM2.62bil compared with RM2.65bil.
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