RHB’s quarterly net profit up 13.9% to RM650mil

"We expect our performance in the financial year ending Dec 31,2021 (FY2021) to be better than FY2020 despite the ongoing headwind, ” said RHB group managing director Datuk Khairussaleh Ramli.

KUALA LUMPUR: RHB Bank Bhd recorded a net profit of RM650.3mil in the first quarter ended March 31, which was a 13.9% increase compared with RM570.9mil in the same quarter last year, mainly due to higher net fund based and non-fund based income.

Revenue for the quarter was RM2.91bil, 9.6% lower than RM3.21bil in the comparative quarter. Earnings per share rose to 16.22 sen versus 14.24 sen a year earlier.

“The group delivered commendable results for the first quarter of the year despite operating in a challenging business environment.

“And, we expect our performance in the financial year ending Dec 31,2021 (FY2021) to be better than FY2020 despite the ongoing headwind, ” said RHB group managing director Datuk Khairussaleh Ramli in a statement accompanying the results.

He added that RHB has reviewed changes to customer-behaviour and the rapid evolution in the way their needs are served during the pandemic.

“This includes digitalisation of customer journeys, transforming credit risk management, modernising our IT infrastructure and ensuring that our workforce is future ready, ” he said.

For the quarter, RHB said net fund-based income rose 12.6% year-on-year (y-o-y) to RM1.42bil due to proactive funding cost management, which dropped 36.4% y-o-y on the back of 25.6% current account savings account (CASA) growth.

Net interest margin for the quarter was 2.17% versus 2.11% in the year-ago quarter.

Non-fund-based income rose 15.5% to RM543.6mil, due mainly to higher capital market, brokerage, wealth management and commercial banking income.

The bank said this was partially offset by lower net trading and investment income.

For the quarter, operating expenses increased 8.3% y-o-y to RM885.4mil.

Cost-to-income ratio narrowed to 46% from 47.3% a year ago due to positive JAWS.

Practising prudence, the group set aside additional provisions to cater for potential adverse impact to asset quality, resulting in expected credit losses rising 15.4% y-o-y to RM173.9mil.

The annualised credit charge ratio stood at 0.39% versus 0.34% in the same quarter last year.

On the balance sheet, total assets increased 3.5% to RM280.5bil as at end-March.

Net assets per share was RM6.65 with shareholders’ equity at RM26.7bil.

The group’s common equity Tier-1 and total capital ratio stood at 15.6% and 17.7% respectively.

Gross loans and financing rose 6.8% y-o-y to RM188.2bil on growth in mortgage, auto finance, small and medium enterprices and Singapore.

Domestic loans and financing grew 6% y-o-y and domestic loans market share stood at 9% as at end-March.

Gross impaired loans stood at RM3.1bil with a gross impaired loans ratio of 1.66% compared with RM3.5bil and 2% respectively a at end-March.

Loan loss coverage ratio excluding regulatory reserves remained storng at 119.5% as at end-March.

Customer deposits increased 12.4% y-o-y to RM218bil, predominantly attributed to CASA and fixed deposits growth of 25.6% and 9.0% respectively. CASA composition stood at 30.6% as at March 31.

Liquidity coverage ratio remained healthy at 153.9%.

RHB Islamic Bank recorded a 44.2% y-o-y increase in pre-tax profit to RM255.4mil, with gross financing recording a robust double-digit growth of 13.7% y-o-y to RM68.9bil.

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