KUALA LUMPUR (Sept 6): General loan financing services provider RCE Capital Bhd said it is benchmarking its loan growth this year against that set by other banks.
“The banks’ average loan growth is at about 5%, so on our side, that’s something we will be benchmarking ourselves against,” RCE Capital’s chief executive officer Loh Kam Chuin said.
Last year, the group recorded a loan growth of 8% for financial year 2018.
Loh noted average loan size per application is increasing per year. As at its first quarter ended June 30, 2018 (1QFY19), the average loan size stood at RM18,000 per application, Loh said.
Should the momentum continue, he is positive the group would do well for the full year.
“Looking at the results of the first quarter, you can get a good indication. But by the second quarter, you will have a better view of how the company is performing.
“However, we essentially do not want to target loan growth for the sake of growing. It’s more important to have quality loans,” he told reporters after the group’s annual general meeting earlier.
RCE, through its unit RCE Marketing Sdn Bhd, mainly provides consumer financing for civil servants.
It currently covers about 80,000 civil servants out of a total of a 1.6 million in the civil service.
RCE Marketing is the main contributor to group revenue, accounting for 97.2% as at end of financial year March 31, 2018 (FY18).
Although the market it covers is small, Loh said the intention is to grow its customer base.
“There are many reasons why civil servants take the loans. Chief among them would be for home renovation, medical, education and other personal use,” he noted.
As for 1QFY19, net profit grew 11% to RM23.2 million from RM20.93 million a year earlier, on higher interest income arising from steady loan growth in its consumer financing segment.
Quarterly revenue also rose at 11% to RM63.24 million, from RM57.1 million in the previous corresponding quarter (1QFY18).
RCE's share price closed the morning session two sen or 1.24% lower at RM1.60, for a market value of RM552.34 million.