KUALA LUMPUR (May 16): Kenanga Investment Bank Bhd (KIBB) saw its net profit surge more than 8 times to RM15.44 million in the first quarter ended March 31, 2018 (1QFY18) from RM1.89 million a year ago, mainly due to bad debt recovery of RM12 million and higher net brokerage and management fees income generated in the current quarter under review.
Earnings per share rose to 2.14 sen in 1QFY18 from 0.26 sen in 1QFY17. Quarterly revenue also increased 7.8% to RM182.33 million from RM169.13 million a year ago.
In a filing with Bursa Malaysia today, KIBB said its stockbroking operating segment registered a pre-tax profit of RM11.8 million in 1QFY18 compared with RM9.7 million in 1QFY17, mainly due to higher brokerage income, interest income and trading and investment income.
"Net brokerage fee income also increased to RM23 million from RM21.6 million due to higher trading value on the stock exchange, which recorded RM357.7 billion for 1QFY18 compared with RM309.3 billion for 1QFY17," it added.
KIBB's investment banking operating segment posted a pre-tax profit of RM2.7 million in 1QFY18 compared with a pre-tax loss of RM200,000 a year ago, mainly due to higher interest income and investment banking fees income.
However, the favourable result was negated by lower trading and investment income from treasury activities.
Going forward, KIBB said the performance of the group is relatively dependent on Bursa's trading volume, which in turn is subject to the aforementioned macroeconomic conditions.
"While Bursa's trading value is currently strong at a daily average of RM4.9 billion, we are cautiously optimistic that the market trading volume will continue to be buoyant for the rest of the year and therefore expect the group to perform better than in the previous year," it added.
"We are cautiously optimistic that the group will continue to record satisfactory performance in 2018. Given the strong fundamentals of the Malaysian capital markets, we believe that our core businesses of equity broking and investment banking will continue to grow in 2018," KIBB group managing director Datuk Chay Wai Leong said in a separate statement.
KIBB shares closed 0.5 sen or 0.81% at 61.5 sen today, with 51,500 shares done, bringing a market capitalisation of RM440.7 million.