POSITIVE RISE IN NET PROFIT FOR KENANGA GROUP


Kenanga Chay qtcht

KUALA LUMPUR: Kenanga Investment Bank Bhd (Kenanga Group) has announced a net profit of RM86.5mil for the nine months ended Sept 30 (9M21), a 37.4% rise from RM63mil in the same period last year (9M20).

Year-to-date net income stood at RM586.3mil, up by 1.4% from the previous corresponding period, while operating expense saw a marginal reduction to RM490.7mil.

Based on 9M21, annualised return on equity is at 11.3%, as compared to 9.0% in 9M20.

Kenanga Group’s strong earnings were mainly attributed to higher contribution from stockbroking and investment management businesses, as well as share of profits from the joint venture with Rakuten Trade Sdn Bhd.

Kenanga Group's strong earnings were mainly attributed to higher contribution from stockbroking and investment management businesses, as well as share of profits from the joint venture with Rakuten Trade.Kenanga Group's strong earnings were mainly attributed to higher contribution from stockbroking and investment management businesses, as well as share of profits from the joint venture with Rakuten Trade.

Its stockbroking division achieved profit before tax (PBT) of RM68.8mil for 9M21 as compared to RM52.7mil in the same period last year.

This was mainly due to higher net interest, improved net trading and investment income, as well as lower credit loss expenses.

Net equity trading investment income increased to RM56.0mil, up 40.2% from the corresponding period.

The division continued to grow its market share – particularly in the retail segment – from 21.9% to 23.5%, reinforcing its position as one of the largest retail brokers in the marketplace.

During the same period, Rakuten Trade achieved yet another milestone, with the fast-growing online trading platform surpassing 200,000 registered accounts.

Meanwhile, Kenanga Group’s investment and wealth management division registered record high PBT, surging over three folds to RM20.6mil in 9M21, as compared to RM7.6mil in the corresponding period last year. The significant increase was attributed to higher performance fee and management fee income, generated on the back of increased assets under administration (AUA) – AUA stood at RM16.3bil, up 18.4% from the same period last year – as well as sales agency force.

Good position for growth

For the quarter under review, net revenue and PBT were impacted by the weakening trading volumes on Bursa Malaysia, which resulted in lower net brokerage and trading and investment income.

For the third quarter of 2021, net revenue stood at RM202.6mil, while PBT stood at RM26.3mil.

“With the gradual reopening of all economic sectors and lifting of restrictions, underpinned by the progress of Covid-19 vaccination campaign, deployment of stimulus measures and the unleashed pent up demand, we remain cautiously optimistic of the country’s economic outlook into the new year,” commented Kenanga Investment Bank Bhd group managing director Datuk Chay Wai Leong.

He added, “Having said that, we are witnessing a deceleration in trading activities not just on Bursa Malaysia, but also on some of the other major bourses around the world.

“This will likely have some impact on our following quarter’s revenue, but on the whole, benefiting from the strength of our diversified revenue streams, we are on track to conclude the year on a footing comparable to the performance last year.

“With our business model centred on digitalisation and the continued practice of prudence throughout our operations, we are in a good position to continue growing the business and deliver long-term shareholder value.

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