Update: RHB Capital 2Q net profit up 36% on year at RM557m

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KUALA LUMPUR (Aug 27): RHB Capital Bhd posted a net profit of RM556.5 million for its second quarter ended June 30, 2014, up 36% from RM410.3 million a year earlier. Profit growth came on higher net interest and Islamic banking income.

In its filing with Bursa Malaysia, RHB said net profit grew on the back of healthy total income growth, higher write-back of asset impairment losses, and significantly lower provision for bad loans.

RHB Capital said revenue rose to RM2.45 billion from RM2.34 billion. During the quarter, bad loan allowance came to RM17.35 million compared to RM144.57 million, RHB Capital's income statement showed.

For the half-year (1HFY14) period, net profit rose to RM1.01 billion from RM767.5 million a year earlier, while revenue climbed to RM4.85 billion from RM4.61 billion.

“For the first half of 2014, allowance for impairment on loans and financing decreased significantly to RM71.6 million from RM299.4 million recorded in the same period last year.

“This was mainly due to individual impairment allowance made on certain corporate accounts in the preceding corresponding period and one time bad debts written off pertaining to the refinement of application of MFRS 139 last year,” said the group.

RHB noted that its 1HFY14 net interest income grew to RM1.6 billion from the previous year, as conventional gross loans rose 11.8%.

Going forward, Kellee Kam, group managing director of RHB Banking Group, says the financial services entity expects to improve its performance in 2014.

“The RHB Banking Group has successfully launched several initiatives under the IGNITE 2017 transformation programme during 2014.

“This provides a strong foundation for the positive momentum of the transformation programme which aims to grow the RHB Banking Group into a leading multinational financial services group by 2020,” said Kam.