RHB Banking group managing director Datuk Khairussaleh Ramli said:
KUALA LUMPUR: RHB Bank Bhd's net profit rose 18.3% to RM578.69mil in the third quarter ended Sept 30, 2018 compared with RM488.83mil a year ago mainly due to higher income and lower allowances for credit losses on loans.
The banking group announced on Tuesday its revenue increased by a slower pace of 8.3% to RM3.20bil from RM2.95bil. Earnings per share were 14.4 sen compared with 12.2 sen.
RHB Bank said the higher net profit was mainly due to higher net fund based and non-fund based income and lower allowances for credit losses on loans and other assets, partly offset by higher overheads.
Net fund-based income increased by 8.9% to RM3.7bil from a year ago. Gorss fund-based income increased by 7.1% on the back of a 4% increase in gross loans and financing, whilst funding and interest expense rose 5.6% on-year,” it said.
Net fund based income increased by 8.9% to RM3.7bil from a year ago. Gross fund based income increased by 7.1% on the back of a 4.0% increase in gross loans and financing, whilst funding and interest expense rose 5.6% year-on-year.
Operating expenses rose by 6.4% to RM2.5bil from a year ago
RHB Bank said allowances for credit losses on loans was at RM245.7mil,18.8% lower than a year ago. This was primarily due to certain recoveries recorded in current period, coupled with substantial impairment provided for oil and gas related companies a year ago.
For the nine-month period, its net profit rose by 16.7% to RM1.74bil from RM1.49bil in the previous corresponding period.
RHB Banking group managing director Datuk Khairussaleh Ramli said: “Our profit for the first nine months this year is our highest ever.”
The banking group's revenue increased by 6.7% to RM9.38bil from RM8.79bil a year ago.
The main drivers for the better net profit were due to an increase in net fund based income by 8.9% to RM3.70bil from a year ago.
Goss fund based income increased by 7.1% on the back of a 4.0% increase in gross loans and financing, while funding and interest expense rose 5.6% year-on-year.
“With re-pricing of deposits coming into effect, NIM moderated to 2.23% for the quarter from 2.29% last quarter, but improved from 2.19% in the previous year’s corresponding quarter.
“Higher non-fund based income by 4.0% at RM1.37bil, contributed largely by higher net foreign exchange gain and trading and investment income,” it said.
Operating expenses rose by 6.4% to RM2.48bil 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.
RHB Bank said on a quarter-on-quarter basis, net profit for the current quarter was at RM578.7mil, 1.5% higher than RM570.3miln in the second quarter ended June 30, 2018.
“This was driven by higher non-fund based income, contributed largely by higher marked-to-market (MTM) gain on securities and derivatives and lower allowances for credit losses on loans,” it said.
Khairussalehi said the group’s performance exhibited resilience despite challenging market conditions and volatility in the global economy.
“Our robust capital levels, healthy liquidity position and adequate coverage for loan losses set us out for sustainable growth.
“Our profit for the first nine months this year is our highest ever. We aim to boost performance and enhance our topline growth, as well as deliver service excellence through our FIT22 five-year strategy, supported by our digital transformation programme focusing on providing value-add interactions and customised services based on differentiated segments. To drive this agenda, we scaled up the Agile way of working across the group,” he said.
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