KUALA LUMPUR: Kenanga Investment Bank Bhd recorded profit after tax and non-controlling interest of RM34.2mil for the first quarter of 2021 – an increase of RM41.1mil relative to a RM6.9mil net loss in the first quarter of 2020.
Announcing its first-quarter financial results for 2021, the independent investment bank said the previous net loss was mainly due to provision of credit loss expenses which has progressively been reversed over the quarters.
Consolidated revenue for the quarter under review increased by 51.3% year-on-year to RM250.1mil. Annualised return on equity is at 13.8%, compared with 10.7% for the entire 2020.
The strong performance was mainly attributable to higher contributions from the stock broking segment and the investment and wealth management segment, as well as higher share of profits from its joint venture with Rakuten Trade.
Kenanga’s stock broking division continued to benefit from the high trading activities on Bursa Malaysia. In the first quarter, the local bourse saw its average daily trading value (ADV) reach RM10bil, which was higher than the ADV of RM8.6bil recorded in the entire 2020.
As a result, pre-tax profit for the first quarter of 2021 from the segment jumped to RM34.3mil, as compared to a pre-tax loss of RM13.6mil in the same period last year.
Pre-tax profit from the investment and wealth management division surged almost 15-fold to RM7.6mil in the first quarter from RM500,000 in the same period a year ago. The significant increase was attributed to the higher management fees income generated.
In the first quarter, the monthly average of new accounts opened was 10,457 for Kenanga’s joint venture, Rakuten Trade – higher against the monthly average of 9,893 new accounts registered in the bumper year of 2020.
“Our digital strategy has proven invaluable in these trying times, ” said Kenanga Investment Bank Bhd group managing director Datuk Chay Wai Leong.
“Technology investments made in the earlier years such as the remisier portal have allowed us to implement remote working before it became the norm.
“Today, we continue to handle high volume of account registrations and manage the servicing of our clients seamlessly in the face of the various movement restriction orders implemented nationwide.
“With the national vaccination programme gaining momentum, we are cautiously optimistic about the health of the overall economy for the second half of the year. Bolstered by our digital initiatives that are in the pipeline, we are on track to boost our ecosystem, sustain growth and deliver against targets for 2021, ” said Chay.
Last month, the group’s wholly-owned subsidiary Kenanga Investors Bhd launched the Kenanga Waqf Al-Ihsan Fund, further expanding on its syariah-compliant investments.
Waqf is an Islamic philanthropic-based vehicle that focuses on areas such as education, healthcare, economic empowerment and environmental preservation. The fund will serve as the launchpad for other similar environmental, social and corporate governance (ESG)-linked products as part of Kenanga Investors’ move towards sustainable and socially responsible investing.
For more information on Kenanga, go to www.kenanga.com.my