KUALA LUMPUR (Aug 29): RHB Bank Bhd's net profit fell 9.5% to RM634.83 million for the second quarter ended June 30, 2022 (2QFY22) from RM701.34 million a year ago mainly due to lower non-fund based income and higher operating expenses.
Earnings per share was lower at 15.28 sen in 2QFY22 from 17.49 sen a year ago. The group declared an interim dividend of 15 sen per share, consisting of a cash payout of 10 sen per share and an electable portion under the dividend reinvestment plan of five sen per share.
“This is equivalent to a payout ratio of 51.2%, which reflects our deep appreciation of the continued trust and support from our shareholders,” said the group in its Bursa Malaysia filing on Monday (Aug 29).
Weaker brokerage income, fund management fees, unit trust fee income and corporate advisory fees were among the main factors dragging the bank’s non-fund based income in 2QFY22, it said.
This is despite net interest income being 1.8% higher at RM1.03 billion in 2QFY22 from RM1.01 billion a year ago, while allowance for credit losses on financial assets fell 83% to RM38.6 million from RM227.26 million.
For the first half of the year (1HFY22), the group’s net profit contracted 8.6% to RM1.23 billion from RM1.35 billion in previous corresponding period, while net interest income inched slightly upward by 0.3% to RM2.02 billion from RM2.01 billion.
RHB’s gross loans and financing grew 3.2% in 1HFY22 to RM204.9 billion, mainly supported by growth in mortgage, auto finance, small and medium enterprise (SME), and Singapore. Domestic loans and financing grew 2.3% year-to-date.
Gross impaired loans stood at RM3.3 billion as at 2QFY22 compared with RM3 billion as at 1QFY22 and RM3 billion at end-2021. Meanwhile, gross impaired loans ratio stood at 1.62% as at 2QFY22 compared with 1.5% as at 1QFY22 and 1.49% at end-2021.
“Loan loss coverage ratio for the group, excluding regulatory reserves, remained strong at 117% as at end-June 2022, compared with 122.4% in December 2021,” it said.
RHB’s customer deposits increased 3.3% year-to-date to RM225.9 billion, predominantly attributed to fixed and money market time deposits growth of 4.2%.
CASA composition stood at 29.3% as at 1HFY22, while liquidity coverage ratio (LCR) remained healthy at 140.9%, the group said.
Going forward, RHB said Malaysia’s economic outlook for 2022 is expected to be anchored by resilient domestic demand following the reopening of the economy and international borders.
“However, certain macroeconomics headwinds such as rising inflationary pressures, geopolitical conflicts, supply chain disruption and a slow-down in global growth are factors which could potentially slow the upward momentum in domestic demand towards end-2022,” it said.
Group managing director and group chief executive officer Mohd Rashid Mohamad said RHB will double down on executing its new three-year strategic plan that focuses on building deeper relationships with customers, prioritising customer experience and driving quality growth with digitalisation and innovation.
“The group has delivered a resilient financial performance despite the challenging macroeconomic environment. This was underpinned by strong fundamentals given our robust capital, healthy liquidity position and adequate coverage for loan losses.
“We nevertheless remain watchful of the uncertainty surrounding the pace of economic recovery and will continue to maintain our prudent stance while closely monitoring our asset quality,” he said in a statement.
Shares of RHB were unchanged at RM5.79 at the midday break, giving it a market capitalisation of RM24.39 billion.