KUALA LUMPUR: Lower non fund based income and higher operating expenses took a bite out of RHB Bank Bhd's second quarter earnings, which fell 9.48% year-on-year (y-o-y) to RM634.83mil.
This brought net profit for the first six months of the year to RM1.24bil, 8.62% lower than in the same period last year.
Earnings per share for 1HFY22 was 29.77 sen compared with 33.71 sen previously.
Revenue for the quarter under review was on par at RM2.99bil as compared with RM2.93bil in the comparative quarter. Over the six-months period, revenue was marginally higher at RM5.84bil versus RM5.83bil a year earlier.
According to group managing director and CEO Mohd Rashid Mohamad, the group's performance was resilient despite the challenging macroeconomic environment.
"This was underpinned by strong fundamentals given our robust capital, healthy liquidity position and adequate coverage for loan losses.
"We nevertheless remain watchful of the uncertainty surrounding the pace of economic recovery and will continue to maintain our prudent stance while closely monitoring our asset quality," he said in a statement.
He added that the group has declared an interim dividend of 15 sen per share, comprising a 10 sen cash payout and a five sen electable portion under the dividend reinvestment plan.
For the first half of 2022, the banking group said non-fund based income declined to RM816.2mil due mainly to lower fee income and net trading and investment income.
However, it said this was partially offset by an improvement in net fund based income to RM3.03bil, driven by 6.7% higher gross fund based income on 7.3% loans growth.
Operating expenses were slightly lower at RM1.75bil, although, the weaker income negatively impacted the cost-to-income ratio, which rose to 45.4% from 44.5% a year earlier.
Expected credit losses (ECL) reduced to RM192.4mil from lower ECL on loans.
Correspondingly, the annualised credit charge ratio improved to 0.16% compared with 0.42% for the same period last year.
As at end June 2022, RHB's Common Equity Tier-1 (CET-1) and total capital ratio stood at 16.6% and 19.2% respectively.
The group’s gross loans and financing grew 3.2% year-to-date to RM204.9bil, mainly supported by growth in mortgage, auto finance, SME and Singapore. Domestic loans and financing grew 2.3% year-to-date.
Gross impaired loans was RM3.3bil as of June 2022 with gross impaired loans ratio of 1.62%, compared with RM3bil and 1.5% respectively as of March 2022, and RM3bil and 1.49% respectively as of December 2021.
Loan loss coverage ratio for the group, excluding regulatory reserves, remained strong at 117% as at end-June 2022, compared with 122.4% in December 2021.
Customer deposits increased 3.3% year-to-date to RM225.9bil, predominantly attributed to fixed and money market time deposits growth of 4.2%.
CASA composition stood at 29.3% as at June 30, 2022. Liquidity coverage ratio (LCR) remained healthy at 140.9%.
