KUALA LUMPUR: RHB Bank Bhd, which saw its net profit jumped 13.8% to RM570.26mil in the second quarter ended June 30, has declared an interim dividend of 7.5 sen per share or 25.9% payout ratio.
The banking group’s revenue for the quarter was marginally higher at RM2.65bil against RM2.62bil in the same quarter last year. Its earnings per share for the quarter stood at 14.20 sen from 12.50 sen previously.
Comparing it with the preceding quarter, RHB’s net profit for the current quarter was at RM570.3mil, a decrease of 3.5% from RM590.8mil previously, due to lower non-fund based income, in particular from the absence of oneoff gain recorded in the preceding quarter and lower marked-to-market (MTM) gain on securities and derivatives.
For the first six months to June 30, RHB posted a record net profit of RM1.16bil, up 16.0% year-on-year, mainly due to higher net fund based and non-fund based income and lower allowances for credit losses on other assets.
Its net fund based income increased by 10.8% to RM2,481.0mil from a year ago. Gross fund based income increased by 6.6% on the back of a 3.1% increase in gross loans and financing, whilst funding and interest expense rose 3.2% year-on-year.
More efficient management of funding cost and redemption of certain sub-debts and senior notes over the year led to improved net interest margin of 2.29% for the quarter from 2.19% in the previous corresponding quarter.
RHB’s non-fund based income was marginally higher by 1.3% at RM904.2mil, contributed largely by higher net foreign exchange gain and trading and investment income, partially offset by decline in insurance underwriting surplus and brokerage income.
The banking group’s operating expenses rose by 7.6% to RM1.66bil from a year ago driven by a rise in personnel costs and IT related expenses as the group continued to invest in technology infrastructure and digital capabilities. Cost-to-income ratio improved to 49.1%.
Total assets for the group increased by 1.8% from December 2017 to RM234.5bil as at June 30, primarily due to an increase in cash and short-term funds and securities portfolio. Shareholders’ equity stood at RM22.5bil, with net assets per share at RM5.61.
The group’s gross loans and financing grew by 3.1% year-on-year to RM161.4bil. Domestic loans and financing grew 4.5% year-on-year contributed mainly by resilient growth in mortgages and SME. The group’s domestic loan market share stood at 9.0% as at end June 2018.
Customer deposits remained at RM166.0bil. As at June 30, total current and savings account (CASA) composition was still healthy at 29.0% compared with 27.9% a year ago.
Gross impaired loans was at RM3.8bil as at June 30, with gross impaired loans ratio of 2.33% from 2.38% (based on FY2018 restated opening balance post-MFRS 9). Loan loss coverage for the group, including regulatory reserves was at 104.1%.
RHB Banking Group group managing director Datuk Khairussaleh Ramli said the group’s earnings momentum was sustained in the second quarter resulting in improved first half 2018 year-on-year performance.
“Our results also reflect strong fundamentals as can be seen in our robust capital levels, healthy liquidity position and adequate coverage for loan losses.
“Through FIT22, our 5-year strategic plan, we have articulated our objectives to build on our core strengths to grow topline especially in key growth areas, boost performance, and deliver service excellence.
“This is underpinned by our digital transformation programme with a clear focus on providing value-add interactions and customized services based on differentiated segments. Adopting Agile as a way of working across the Group is a key driving force in growing our business and in the implementation of FIT22,” Khairussaleh said.
Barring unforeseen circumstances, the group expects to achieve better performance in 2018.
Win a prize this Mother's Day by subscribing to our annual plan now! T&C applies.
