KUALA LUMPUR (May 24): Kenanga Investment Bank Bhd saw its net profit halve to RM7.79 million in the first quarter ended March 31, 2019 from RM15.44 million a year ago, dragged by lower bad debt recovery.

Quarterly revenue came in 10.5% lower at RM156.64 million compared with RM175.11 million previously, as a result of lower brokerage fees, interest income and trading and investment income mainly due to weaker market condition.

In its exchange filing today, Kenanga said the decrease in its profitability was partially mitigated by the higher management fee income achieved, as well as a reversal of credit loss expense.

For its stockbroking segment, lower income was recorded as a consequence of lower Bursa Malaysia trading volume transacted of 339.2 billion, compared with 398.8 billion in 2018.

Its investment banking segment recorded better profitability due to the increase in net trading and investment gain on Government securities.

Meanwhile, its investment and wealth management achieved profitability, compared to a loss, due to higher management fee income generated.

The futures broking segment as well as money lending and financing segments continued to bleed, mainly due to lower commission income partially mitigated by higher interest income generated, and lower fee income from loan and financing.

Weaker result was recorded for its corporate and others segment due to a one-off bad debt recovered of RM12 million from the net settlement of a court case during the same period last year, Kenanga said.

The group is of the view that the current year will be challenging and noted that the country’s gross domestic product growth is expected to remain subdued at 4.5%.

But despite the difficult market conditions, the group said its equity broking market share rose 0.4% to 8.96% for the first quarter, which is a positive indication of its continued growing position in the marketplace.

“With global uncertainties and the expected moderation of domestic economic growth, the current financial year is a challenging one for our industry. Kenanga’s continued focus on innovation, digitalisation and productivity, as well as, the commitment from our people will remain our greatest assets as we weather these headwinds,” group managing director of Kenanga Datuk Chay Wai Leong commented in a separate statement.

Shares in Kenanga closed unchanged at 55 sen today, for a market capitalisation of RM384.28 million.