Strong fundamentals lift RHB Bank’s earnings


Group managing director and group chief executive officer Datuk Khairussaleh Ramli said RHB’s stellar earnings were underpinned by strong fundamentals, as it remains to be the best capitalised bank in the industry with robust liquidity levels.

KUALA LUMPUR: RHB Bank Bhd, which continued its positive earnings momentum in the first nine months of 2021, will remain vigilant and make proactive credit provisions when necessary as the Covid-19 pandemic continues to impact the livelihoods of its customers.

In a statement yesterday, group managing director and group chief executive officer Datuk Khairussaleh Ramli said RHB’s stellar earnings were underpinned by strong fundamentals, as it remains to be the best capitalised bank in the industry with robust liquidity levels.

“Nevertheless, the group will continue to be vigilant, monitoring asset quality and making proactive credit provisions when necessary, while we strive to uphold our prudent stance.”

Khairussaleh noted that “we are committed to ensuring that our customers receive the financial assistance that they need during these difficult times, especially the vulnerable members of society as well as small and medium-sized enterprises (SMEs) and micro-enterprises.”RHB’s net profit for the third quarter ended Sept 30, 2021, increased from RM622.2mil to RM635.6mil, mainly due to higher total income.

Total assets for the group increased by 3.6% from December 2020 to RM280.9bil as at Sept 30, 2021.

Net assets per share was RM6.85, with shareholders’ equity at RM27.9bil as at September 2021.

Additionally, RHB said its capital position remained strong.

“The group’s common equity Tier-1 (CET-1) and total capital ratio stood at 16.8% and 19.4% respectively.

“The group’s gross loans and financing grew by 4.6% year-to-date to RM194.6bil, mainly supported by growth in mortgage, SME, commercial and Singapore.

Domestic loans and financing grew 2.6% year-to-date.

“Gross impaired loans improved to RM2.6bil as at Sept 30, 2021, with a gross impaired loans ratio of 1.32% compared with RM3.1bil and 1.63% respectively as of June 2021; and RM3.2bil and 1.71% respectively as of December 2020.”

RHB said loan loss coverage ratio for the group, excluding regulatory reserves, strengthened to 147.9% as at end-September 2021, from 124.1% in June 2021.

“Customer deposits increased by 5.2% year-to-date to RM214bil, predominantly attributed to fixed and money market time deposits growth of 6.6% and current account savings account (Casa) of 2.8%.

“Casa composition stood at 30.1% as at Sept 30, 2021. Liquidity coverage ratio remained healthy at 138%.”

For the nine-month period ended Sept 30, 2021, RHB recorded a net profit of RM1.99bil, compared with RM1.59bil in the same period last year.

“Net fund-based income improved to RM4.34bil, driven by proactive funding cost management which dropped 28.9% year-on-year, supported by Casa growth of 4.8%.

“Net interest margin for the quarter was 2.13%, compared with 1.99% recorded in the corresponding period last year.”

Additionally, RHB said non-fund-based income declined to RM1.74bil, primarily from lower net trading and investment income which offset higher insurance underwriting surplus, as well as fee income growth from capital market, asset management and commercial banking.

“Operating expenses increased by 4.6% from a year ago to RM2.61bil. With positive income growth exceeding expense growth, cost-to-income ratio improved to 44.5% compared with 48.8% a year ago.”

“RHB said it remained prudent and continued to be proactive by setting aside additional provisions to cater for potential adverse impact to asset quality.

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