Sound strategy: Kenanga Investment Bank’s diversified strategy enabled it to thrive, says Chay.

KUALA LUMPUR: Kenanga Investment Bank Bhd delivered a new all-time high with its full year financial results ended Dec 31, 2021, surpassing its record performance from the year before.

The independent investment bank’s profit before tax (PBT) increased to RM148.2mil, as compared to RM134.7mil the previous year, while its profit after tax (PAT) surged by 16.2% to RM118.8mil from the corresponding period last year.

Its revenue stood at RM891.5bil, with annualised return on equity reported at 11.5%, up from 10.7% the year before and earnings per share rose 11.9% from 14.6 sen to 16.3 sen in the same period.

In addition, its board of directors has declared a dividend of 10.5 sen per share, its highest since becoming an investment bank.

“The year 2021 was a year of two halves for the Malaysian capital markets.

“The first half was largely shaped by the same robust momentum that fuelled our bumper year in 2020.

“The retail-driven strong trading volumes on Bursa Malaysia led to the excellent performance in our stockbroking business,” commented Kenanga Investment Bank Bhd managing director Datuk Chay Wai Leong.

He added, “However, this momentum moderated sharply in the second half of the year, as the country was hit by multiple headwinds, including the reintroduction of lockdown measures in the middle of the year due to surging Covid-19 cases.”

The FBM KLCI, which hovered above 1,600 points at the start of the year, slipped below 1,500 points during the second half. Daily average trading value weakened to RM4.1bil in December from a high of RM10.6bil in February 2021.

“Despite the tumultuous year, our stockbroking business continued to contribute the lion’s share of our 2021 bottom line, which was further reinforced by the significant strides made by both our asset management and private equity businesses.

“This enabled us to thrive through the volatilities to deliver a stellar performance that beat the odds – a testimony to the strength of our diversified strategy,” he said.

Its stockbroking division maintained a PBT of RM86.4mil for the year ended 2021, similar to the PBT of the previous year.

Its retail market share grew to 24.2% from 22.2%, driven by the continuous expansion of its joint venture Rakuten Trade, Malaysia’s first fully digital stock trading platform.

Meanwhile, its investment management division grew by almost three folds to a record PBT contribution of RM34.9mil.

This was attributed to the higher performance fee and management fee income generated from increased asset under administration to RM18.8bil and a 60% growth in sales agency force.

Kenanga Investment Bank’s private equity arm also had an exceptional year in 2021, with Fund I vintages maturing and in the harvesting period.

RM24.6mil gains were recognised during the year.

He shared, “Looking forward, digital, which has been central in shaping our growth journey, will continue to play a pivotal role in powering our next phase of advancement.”

Most recently, Kenanga Investment Bank launched Malaysia’s latest robo-advisor, Kenanga Digital Investing (KDI).

This follows the successful introduction of Rakuten Trade, which recently launched stock trading in the US markets at the same competitive commissions as trading on the local bourse.

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