RHB Bank posts first-quarter earnings of RM730mil

KUALA LUMPUR: RHB Bank Bhd has recorded improvements in total income and operating profit for the first quarter of 2024 (1Q24), but has been negatively impacted by higher operating costs and expected credit losses (ECL).

In 1Q24, the bank posted a net profit of RM730.17mil, which was lower than RM761.67mil in the year-ago quarter, which translates to an earnings per share of 17.03 sen compared to 17.93 sen in the comparative quarter.

RHB Bank said operating expenses were RM959.2mil, mainly owing to higher personnel, establishment and marketing costs.

The cost-to-income ratio stood at 45.9%.

Meanwhile, the bank’s ECL was RM215mil, primarily owing to higher ECL on loans and higher bad debts written off. The annualised credit charge ratio stood at 0.25%.

On top line, however, the bank posted a higher revenue of RM4.4bil as compared to RM3.92bil in 1Q23.

RHB Bank said total income rose 9.5% year-on-year (y-o-y) to RM2.1bil as non-fund based income jumped 31.6% to RM702.7mil due to higher fee income, net gains on forex and derivatives, net trading and investment income, and net income from the insurance business.

The bank’s net fund-based income increased marginally y-o-y to RM1.4bil on the back of higher funding income, mainly due to growth in gross loans and financing of 5.4%.

It said the net interest margin (NIM) was 1.83%, while effective NIM was 1.94% after taking into account its management of funding costs through active liability management initiative.

Year-to-date, the group’s gross loans and financing grew 1.1% to RM224.9bil, while customer deposits were at RM242.9bil.

Current account savings account (Casa) grew 2.9% year-to-date to RM70.4bil while Casa composition stood at 29%.

Group managing director and chief executive officer Mohd Rashid Mohamad said the bank delivered a commendable financial performance in 1Q24 with a strong balance sheet due to robust capital and liquidity positions.

He added that the bank is on track to achieving its revised Sustainable Financial Services target of RM50bil under its Sustainability Strategy and Roadmap.

“On a cumulative basis, we have attained over RM26.4bil, equivalent to almost 53% of our refreshed Sustainable Financial Services target,” he said in a statement.

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