KUALA LUMPUR (Feb 27): RHB Capital Bhd reported a 4% drop in fourth quarter net profit to RM486.19 million from a year earlier as net interest income fell while operating expenses rose. Impairment losses and higher minority interest also curbed bottom line.

In a statement to the exchange today, RHB Capital (fundamental: 1.5; valuation: 2.1) said net profit in the fourth quarter ended December 31, 2014 (4QFY14) fell from RM504.52 million. Revenue rose to RM2.84 billion from RM2.51 billion.

RHB Capital said net interest income declined to RM805.55 million from RM865.04 million. Operating expenses rose to RM987.03 million from RM820.92 million.

Full-year net profit climbed to RM2.04 billion from RM1.83 billion a year earlier. Revenue was higher at RM10.41 billion versus RM9.58 billion.

Despite the lower 4QFY14 net profit, RHB Capital plans to pay a dividend of six sen a share for the quarter.

Looking ahead, RHB Capital said the Malaysian banking sector was expected to moderate this year.

This is in anticipation that regulations to curb consumer debt would affect consumer loan growth while private investment expansion slows. RHB Capital said it would focus on quality assets and earnings growth to sustain its financials.
 
"Barring unforeseen circumstances, the group is confident that its performance for the financial year 2015 will be better than 2014," RHB Capital said.

At 12:30pm today, RHB Capital shares rose five sen or 0.6% to RM7.98 for a market capitalisation of RM20.53 billion.

The stock had risen 5% this year versus the FBM KLCI's 3% gain.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)