KUALA LUMPUR (May 27): RHB Bank Bhd saw its net profit for the first quarter ended March 31, 2021 (1QFY21) grow almost 14% to RM650.29 million from RM570.88 million a year ago, mainly due to higher net funding and non-fund-based incomes, partially offset by higher allowances for credit losses, higher operating expenses and net modification loss.

As a result, earnings per share rose to 16.22 sen compared with 14.24 sen previously, the group's filing with a local bourse today showed.

Despite the rise in net profit, quarterly revenue, meanwhile, fell 9.61% to RM2.91 billion versus RM3.21 billion in the previous year.

In a statement, the bank said its net fund-based income, which is derived from lending activities, grew by 12.6% year-on-year (y-o-y) to RM1.417 billion, driven by proactive funding cost management.

Its non-fund-based income climbed 15.5% y-o-y to RM543.6 million, contributed largely by higher capital market, brokerage, wealth management and commercial banking fee incomes. These was partly offset by lower net trading and investment incomes.

RHB Bank's operating expenses increased by 8.3% from a year ago to RM885.4 million. Its cost-to-income ratio improved to 46%, compared with 47.3% a year earlier.

"The group's gross loans and financing grew by 6.8% year-on-year to RM188.2 billion, mainly supported by growth in mortgage, auto finance, SME (small and medium enterprise) and Singapore," it said.

"Gross impaired loans were RM3.1 billion as at March 31, 2021, with a gross impaired loan ratio of 1.66% compared with RM3.5 billion and 2% respectively as at March 31 2020. Loan loss coverage ratio for the group, excluding regulatory reserves, remained strong at 119.5% as at end-March 2021," it said.

The bank said domestic loans and financing grew 6% y-o-y, while its domestic loan market share stood at 9% as at end-March 2021.

It said, it remains prudent and continued setting aside additional provisions to cater for potential adverse impact on asset quality.

Consequently, ECL (expected credit loss) increased by 15.4% from the previous corresponding period to RM173.9 million with the annualised credit charge ratio standing at 0.39% compared with 0.34% for the same period last year.

RHB Banking Group managing director Datuk Khairussaleh Ramli said the bank's performance in FY21 will be better than in FY20 despite the ongoing Covid-19 headwinds.

"Given the continued economic uncertainties brought about by the recent surge in positive Covid-19 cases, the group will continue to exercise vigilance and prudence, maintaining our focus on upholding our strong fundamentals by preserving capital and liquidity strength, and closely monitoring asset quality by intensifying our recovery and collection efforts.

"At the same time, we have been engaging our customers and will continue to provide assistance where necessary to see them through this challenging period," he said.

As at March 31, the bank's total repayment assistance approved stood at RM25.5 billion, equivalent to 15.3% of RHB Bank's domestic loans and financing, benefitting 182,742 customers, both individuals and businesses.

"With several repayment assistance programmes made available, customers can come forward and get in touch with us through our various channels. While we stay the course with our five-year strategy, FIT22, we have reviewed, reprioritised and accelerated our initiatives in response to the swift changes in customer behaviour and the rapid evolution in the way we serve the needs of our customers brought about by the pandemic.

"These include digitalisation of customer journeys, transforming credit risk management, modernising our IT infrastructure and ensuring that our workforce is future ready," added Khairussaleh.

At noon break, RHB Bank was one sen or 0.19% lower at RM5.21 with some 813,400 shares changing hands. Its market capitalisation is at RM20.89 billion.