RHB Bank 2Q net profit up 14%, pays 7.5 sen dividend

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KUALA LUMPUR (Aug 30): RHB Bank Bhd reported a 13.8% increase in net profit for its second quarter ended June 30, 2018 (2QFY18) to RM570.26 million, from RM500.96 million a year ago, mainly driven by higher net fund based and non-fund based income and lower allowances for credit losses on other assets.

This resulted in improved earnings per share of 14.2 sen, compared with 12.5 sen in 2QFY17.

Quarterly revenue rose by a marginal 1.1% to RM2.66 billion, from RM2.63 billion in 2QFY17.

RHB Bank declared an interim dividend of 7.5 sen per share for the financial year ending Dec 31, 2018 (FY18), at a payment date to be determined later.

For the first half of the year (1HFY18), net profit for the group came in 16% higher at RM1.16 billion from RM1 billion previously, while revenue rose 3.6% to RM5.44 billion from RM5.25 billion in 1HFY17.

In its exchange filing today, the group said the better earnings registered for 2QFY18 was partially offset by higher overheads and allowances for credit losses on loans.

"Net fund based income increased by 10.8% to RM2.48 billion from a year ago. Gross fund based income increased by 6.6% on the back of a 3.1% increase in gross loans and financing, while funding and interest expense rose 3.2% year-on-year (y-o-y).

"More efficient management of funding cost and redemption of certain sub-debts and senior notes over the year led to improved net interest margin of 2.29% for 2QFY18, from 2.19% in the previous corresponding quarter," it said.

Non-fund based income for 2QFY18 grew a marginal 1.3% to RM904.2 million, it added, contributed largely by higher net foreign exchange gain and trading and investment income, partially offset by decline in insurance underwriting surplus and brokerage income.

The group's gross loans and financing grew by 3.1% y-o-y to RM161.4 billion, with domestic loans and financing up 4.5% on resilient growth in mortgages and SME loans.

In a separate statement, RHB Bank said it expects to achieve better performance in 2018.

The banking group is projecting a "moderate" 5% expansion of the Malaysian economy this year, against a gross domestic product growth of 5.9% recorded in 2017.

"Economic growth is expected to be led by an acceleration in private sector consumption while exports, private investment and public spending are anticipated to grow at a slower pace.

"Through FIT22, our five-year strategic plan, we have articulated our objectives to build on our core strengths to grow topline especially in key growth areas, boost performance, and deliver service excellence.

"This is underpinned by our digital transformation programme with a clear focus on providing value-add interactions and customized services based on differentiated segments," said its group managing director Datuk Khairussaleh Ramli in the statement.

RHB Bank shares ended the morning session six sen or 1.11% lower at RM5.34 today, bringing a market capitalisation of RM21.65 billion.