KUALA LUMPUR: RHB Bank Bhd reported net profit of RM 650.3 million in the first quarter ended March 31, an increase of 13.9% from RM 570.9 million in the same quarter of the year last, mainly due to income based on the fund.
Revenue for the quarter was RM 2.91 billion, 9.6% lower than RM 3.21 billion in the comparative quarter. Earnings per share rose to 16.22 sen from 14.24 sen a year earlier.
“The group achieved commendable results for the first quarter of the year despite operating in a difficult business environment.
“And, we expect our performance for the fiscal year ending December 31, 2021 (FY2021) will be better than that of fiscal 2020 despite the ongoing headwind,” said RHB Group Managing Director Datuk Khairussaleh Ramli in a press release accompanying the results.
He added that RHB has looked at changes in customer behavior and the rapidly changing way their needs are being met during the pandemic.
“This includes digitizing customer journeys, transforming credit risk management, modernizing our IT infrastructure and ensuring our workforce is ready for the future,” he said.
For the quarter, RHB said fund-based net income increased 12.6% year-over-year (year-over-year) to RM1.42 billion due to proactive management of funds. financing costs, which fell 36.4% year-over-year thanks to a 25.6% current savings account (CASA) growth.
The net interest margin for the quarter was 2.17% compared to 2.11% in the quarter last year.
Non-fund-based income increased 15.5% to RM 543.6 million mainly due to higher income from capital market, brokerage, wealth management and commercial banks.
The bank said this was partially offset by lower net trading and investing income.
For the quarter, operating expenses increased 8.3% year-on-year to RM 885.4 million.
The cost-to-income ratio narrowed to 46% from 47.3% a year ago due to positive JAWS.
Exercising caution, the group made additional provisions to deal with a potential negative impact on asset quality, leading to an increase in expected credit losses of 15.4% year-on-year to RM 173.9 million.
The annualized credit expense ratio was 0.39% compared to 0.34% in the same quarter last year.
On the balance sheet, total assets rose 3.5% to RM 280.5 billion at the end of March.
Net assets per share was RM6.65 and equity was RM26.7 billion.
Tier-1 ordinary shares and the group’s total capital ratio stand at 15.6% and 17.7% respectively.
Gross lending and financing grew 6.8% year-on-year to RM 188.2 billion due to growth in mortgages, auto finance, small and medium-sized businesses and Singapore.
Domestic lending and financing grew 6% year-on-year and the domestic lending market share stood at 9% at the end of March.
Gross impaired loans amounted to RM 3.1 billion with a gross impaired loan ratio of 1.66% versus RM 3.5 billion and 2% respectively at the end of March.
The loan loss coverage ratio excluding regulatory reserves remained stable at 119.5% at the end of March.
Customer deposits increased 12.4% year-on-year to RM218bil, mainly attributable to the growth of CASA and term deposits of 25.6% and 9.0% respectively. The composition of CASA stood at 30.6% as of March 31.
The liquidity coverage ratio remained healthy at 153.9%.
RHB Islamic Bank recorded a 44.2% yoy increase in pre-tax profit to RM255.4 million, with gross funding registering a robust double-digit growth of 13.7% yoy to 68, 9 billion RM.