KUALA LUMPUR (Nov 28): K&N Kenanga Holdings Bhd’s net profit jumped to RM20.09 million in the third quarter ended Sept 30, 2014 (3QFY14) from RM2.26 million a year ago, while revenue was 21% higher at RM168.05 million, from RM138.88 million in the previous corresponding quarter.

For the nine months ended Sept 30 (9MFY14), Kenanga made a net profit of RM27.25 million, reversing its net loss of RM9.14 million a year ago. Revenue was 17% higher at RM441.46 million from RM378.70 million in 3QFY13.

In its financial results release today, Kenanga said its improvement in 9MFY14 pre-tax profit of RM33.8 million, compared with a pre-tax loss of RM10.3 million a year ago, to exceptional expense last year, largely due to merger costs between Kenanga and ECM Libra Investment Bank Bhd.

“Included in 9MFY13 was exceptional expense of RM27.7 million merger costs arising from the acquisition and business merger between the Bank and EIBB (now known as ECM Libra Bhd).

“The merger costs were partially mitigated by exceptional gain of RM13.1 million on acquisition of ING Funds Bhd (now known as Kenanga Funds Berhad),” it said.

Aside from that, Kenanga’s stockbroking business led the performance in 9MFY14, recording a profit before tax (PBT) of RM12.4 million from a loss before tax of RM100,000 due to better income from brokerages and margin financing. Its equity broking had lower overheads due to cost rationalisation in 2013.

Meanwhile, its investment banking registered a profit before tax of RM6.7 million in 9MFY14 from RM4 million a year ago, mainly due to higher fee billings in 9MFY14 and lower operating costs.

 “Barring unforeseen circumstances the board of directors and management are confident that the group will perform better than previous year's results,” said Kenanga.

The investment banking group expects the domestic economic growth to taper in the remainder of 2014 and 2015, on account of impact of the government’s budget consolidation and fiscal reform measures on consumer spending and uneven global economic growth.

Kenanga share price closed unchanged at 59.5 sen, giving it a market capitalisation of RM435.40 million.