KUALA LUMPUR (Feb 25): Kenanga Investment Bank Bhd's net profit soared 351% to RM39.29 million in the fourth quarter ended Dec 31, 2020 (4QFY20) from RM8.71 million a year earlier, supported by higher contributions from its stockbroking, investment management businesses and higher share of profit through its joint venture with Rakuten Trade.

In a filing exchange, the financial services company highlighted its revenue grew 67% to RM276.82 million compared with RM166.16 million due to higher trading and investment income reported in the quarter.

Earnings per share jumped to 5.56 sen from 1.25 sen as a result.

For the full year (FY20), the group's net profit jumped to RM102.08 million from RM26.39 million while its revenue went up by 50% to RM973.76 million from RM651.27 million. Earnings per share rose to 14.56 sen from 3.78 sen.

Kenanga said its stockbroking segment reported an increase in quarterly revenue to RM178.68 million from RM64.3 million, fuelled by higher trading and investment income generated during the period.

Meanwhile, higher management fee income and performance fee generated for the period supported the growth in revenue for its investment and wealth management segment to RM41.82 million from RM27.35 million.

Its investment banking segment, however, recorded a decline in revenue to RM54.98 million against RM67.99 million due to lower investment bank fee income.

Commenting on the group's earnings, Kenanga managing director Datuk Chay Wai Leong said income contribution from its stockbroking division rose together with the vibrancy of the market as most stock markets around the world experienced a remarkable and protracted surge in trading volumes, underpinned by reignited retail interest.

"We ended the year as the number one retail stockbroker in Malaysia by trading value.

"Overall, the events that unfolded in 2020 served as a validation of the group's persistent focus on digital in recent years. Our efforts of securing strategic partnerships, making sound acquisitions, and refining digital products and services have prepared us to be future-ready," he said in a statement.

Moving forward, Kenanga expects Bank Negara Malaysia (BNM) to maintain the overnight policy rate (OPR) at 1.75% amid better economic outlook this year.

"Should things take a turn for the worse, we believe that BNM still has the capacity to cut the OPR by another 25 to 50 basis points," it said.

It added, the group also will proactively manage its risks such as liquidity, credit and market risks to mitigate the impact of slowdown in the economy resulting from the Covid-19 outbreak.

"We expect the year to be volatile and challenging but will stay focused on our strategic objectives of achieving long-term sustainable growth through digitalisation initiatives across the group," it said.

On Feb 2, Kenanga completed the acquisition of i-VCAP Management Sdn Bhd (i-VCAP), a shariah-compliant investment management services provider.

With the latest addition, the group will effectively become the top issuer of shariah-compliant ETF in the country in terms of the number of ETF issues.

The group also has entered into a conditional agreement to acquire a 19% stake in a licensed cryptocurrency exchange, Tokenize Technology (M) Sdn Bhd, in line with the group's initiative to create a robust digital ecosystem.

At the market close, Kenanga was up 3.26% or six sen to RM1.90, giving it a market capitalisation of RM1.37 billion.