Higher interest boosts RCE Capital profits

PETALING JAYA: Higher interest and fee income is helping to boost profits at RCE Capital Bhd, with the company expected to better its previous financial year performance amid steady demand for personal loans.

Increased contribution from its consumer financing lifted the group’s net profit in the third quarter ended Dec 31, 2017 by 5.2% to RM22.9mil compared with the RM21.8mil made a year earlier.

“The stronger bottom line was mainly underpinned by the higher interest and fee income from our consumer financing segment,” it said.

Revenue-wise, the company registered a significant growth of 10.37% year-on-year (y-o-y) to RM64mil. A year earlier, its revenue stood at RM57.98mil.

RCE Capital is controlled by prominent banker Tan Sri Azman Hashim, who owns a 58.6% stake via Amcorp Group.

Cumulatively, in the first nine months of financial year 2018, the financial services firm recorded a 13.79% growth in net profit to RM65.66mil, given the stronger consumer financing segment.

Its revenue rose by nearly 10% y-o-y to RM182.66mil, as compared to RM166.08mil in the previous corresponding period.

Moving forward, RCE Capital said it expected its profitability for the current financial year of 2018 to be better y-o-y, mainly as a result of the demand in the consumer financing segment, as well as the group’s efforts in leveraging on its key business strengths.

“Loan portfolio quality remains a priority, as the group periodically assesses its products and credit scoring model to remain competitive and relevant in a dynamic market environment.

“This complements the risk-based pricing approach, which facilitates our efforts in managing expected yield and return to the group. Meanwhile, the group endeavours to sustain its growth by ongoing process simplification and technological enhancement initiatives to promote operational efficiencies.

“In addition, the group continues to place emphasis on motivating and monitoring the performance of its distribution channels, while it expects modest growth in its consumer financing segment following the adoption of a vigilant stance in the present competitive and dynamic market environment,” it said.

The group did not declare any dividend in the quarter in review. Earnings per share was at 6.71 sen.