RHB's Q2 earnings rise 7.9% to RM615.4m

KUALA LUMPUR: RHB Bank Bhd's net profit for the second quarter ended June 30, 2019, was 7.9% higher from the previous corresponding quarter at RM615.4mil on the back of higher non-fund based income and lower expected losses on loans.

Cumulatively, net profit in the first half of 2019 rose to RM1.25bil, a 7.3% improvement over the comparative period.

The group declared an interim dividend of 12.5 sen per share, which represented a 40.2% payout based on its first-half results, it said in an announcement to the stock exchange.

In 1H2019, non-fund based income improved significantly by 21.8% y-o-y to RM1.1bil owing mainly to higher net trading and investment income, insurance underwriting surplus and higher capital market related fee income.

Meanwhile, gross fund based income increased 7.4% on the back of a 6.9% increase in gross loans and financing, although this was marginally offset by the impact of the OPR cut in May 2019.

"Funding and interest expense rose 16.4% Y-o-Y due to the impact from the OPR hike in January 2018 coupled with higher deposit base.

"As a result, net fund based income declined by 2.6% Y-o-Y," it said.

Operating expenses rose 2.7% to RM1.71bil from a year ago due to higher personnel, IT and marketing costs. Cost-to-income (CIR) ratio improved to 48.5% from 49.1% a year ago.

On a segmental basis, the business banking segment's 1H2019 pre-tax profit surged 64.7% year-on-year (y-o-y) to RM257mil owing to higher net fund-based income and a higher write back of expected credit losses (ECL) on loans.

The segment experienced 4.5% growth in gross loans and financing to RM25.7bil, led by retail SMEs.

"SME loans and financing grew 3.3% year-to-date since December 2018, ahead of industry which declined by 0.4%," said RHB group managing director Datuk Khairussaleh Ramli.

Meanwhile, the retail banking segment saw a 0.9% y-o-y rise in pre-tax profit to RM501.4mil on the back of higher net fund based income.

Retail loans and financing jumped 9.1% to RM87.8bil while retail deposits grew 14.3% to RM57.3bil.

The group's Islamic business also experienced a double-digit jump in pre-tax profit on lower ECL in financing and higher net fund-based income. In 1H2019, pre-tax profit for the Islamic arm expanded 30.7% y-o-y to RM359.2mil.

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