Thursday 28 Mar 2024
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This article first appeared in The Edge Financial Daily on June 1, 2018

KUALA LUMPUR: RHB Bank Bhd reported its best-ever quarterly net profit of RM590.82 million in the first quarter ended March 31, 2018 (1QFY18), up 18.1% from RM500.28 million a year ago, largely driven by higher net fund-based and non-fund-based income, as well as lower allowance for expected credit losses.

This resulted in higher earnings per share of 14.7 sen for 1QFY18, compared with 12.5 sen for 1QFY17.

Quarterly operating income also increased 6.1% to RM2.78 billion from RM2.62 billion a year ago.

In a filing with Bursa Malaysia yesterday, RHB Bank said net fund-based income increased 13% year-on-year (y-o-y) to RM1.23 billion in 1QFY18.

“Gross fund-based income increased 6.1% y-o-y, arising from growth in loans and financing. Funding and interest expense remained relatively flat throughout the year despite growth in total deposits, primarily due to better funding cost management, a healthy 14.3% y-o-y current and savings account growth, and redemption of certain sub-debts and senior notes over the year.

“These factors together with the positive impact from the overnight policy rate hike in January 2018 have resulted in an improved net interest margin of 2.28% for 1QFY18,” it added.

Non-fund-based income was 15.7% higher at RM534.5 million, contributed largely by a higher net foreign exchange gain and higher trading and investment income, partially offset by a lower insurance underwriting surplus and lower brokerage income.

The group’s gross loans and financing grew by 4.3% y-o-y to RM161.2 billion. Domestic loans and financing grew 6.7% y-o-y, contributed mainly by a growth in mortgages and small and medium enterprises. The group’s domestic loan market share remained at 9.1% as at end-March 2018.

On prospects, RHB Bank said market and industry players will be keenly awaiting the economic policies of the new government, which are expected to boost consumer spending.

“The group remains focused in executing its five-year strategy FIT22, to boost performance, build scale and deliver service excellence. Digital enhancements and agile way of working will feature prominently in the implementation of the strategy.

“Barring unforeseen circumstances, the group expects to achieve a better performance this year,” it said.

 

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