KUALA LUMPUR (Nov 30): RHB Bank Bhd’s net profit for the third quarter ended Sept 30, 2021 (3QFY21) rose 2.14% to RM635.59 million from RM622.25 million a year ago mainly due to higher total income.

Quarterly revenue increased 2.74% to RM3.03 billion from RM2.94 billion last year, the country's fourth largest banking group in terms of assets said in a filing with Bursa Malaysia on Tuesday (Nov 30).

Earnings per share were 15.64 sen versus 15.52 sen previously. 

On a quarterly basis, RHB Bank saw its net profit slip 9.37% from RM701.34 million for the immediate preceding quarter (2QFY21) primarily due to higher net modification losses and higher allowances for credit losses, partially offset by higher net fund-based income and non-fund-based income.

This was despite the group’s revenue rising 3.44% from RM2.92 billion for 2QFY21.

For the cumulative nine months ended Sept 30, 2021, RHB Bank’s net profit rose 24.68% to RM1.99 billion from RM1.59 billion, notwithstanding a 5.94% drop in revenue to RM8.86 billion from RM9.42 billion.

On its prospects, RHB Bank expects the economy to be on a recovery path, premised on the high vaccination rate nationwide as well as continued relaxation of movement control order measures, including the lifting of the interstate travel ban and reopening of more economic activities, as the country enters the last quarter of the year.

Nevertheless, RHB Bank said the banking sector is expected to remain resilient, supported by strong capital and liquidity levels, and the proactive provisioning that had been made since last year. 

“On the monetary front, while Malaysian Government Securities' yield across all maturities has been trending upwards, we expect the overnight policy rate to remain stable for the rest of the year,” it said. 

In a separate statement, RHB Bank said its net fund-based income improved to RM4.34 billion, driven by proactive funding cost management, which dropped 28.9% year-on-year, supported by a current and savings account (CASA) growth of 4.8%. 

The net interest margin for the quarter was 2.13%, compared with 1.99% recorded for the corresponding period last year, added the group.

Meanwhile, its non-fund-based income declined to RM1.74 billion, primarily due to lower net trading and investment income which offset a higher insurance underwriting surplus and fee income growth from the capital market, asset management and commercial banking.

Total assets for the group increased by 3.6% in value from December 2020 to RM280.9 billion as at Sept 30, 2021.

RHB Bank noted that its capital position remained strong, with the group’s Common Equity Tier 1 and total capital ratios standing at 16.8% and 19.4% respectively.

“The group’s gross loans and financing grew by 4.6% year-to-date (YTD) to RM194.6 billion, mainly supported by growth in mortgage, small and medium enterprise, commercial and Singapore. Domestic loans and financing grew 2.6% YTD.

“Gross impaired loans improved to RM2.6 billion as at Sept 30, 2021 with a gross impaired loans ratio of 1.32%, compared with RM3.1 billion and 1.63% respectively as of June 2021, and RM3.2 billion and 1.71% respectively as of December 2020. 

“The loan loss coverage ratio of the group, excluding regulatory reserves, strengthened to 147.9% as at end-September 2021 from 124.1% in June 2021,” it said.

RHB Bank also said its customer deposits increased by 5.2% YTD to RM214 billion, predominantly attributed to fixed and money market time deposit growth of 6.6% and CASA of 2.8%. 

In addition, the group’s CASA composition stood at 30.1% as at Sept 30, 2021, while its liquidity coverage ratio remained healthy at 138%.

At Tuesday's noon break, RHB Bank was five sen or 0.95% higher at RM5.31, with some 390,700 shares changing hands. Its market capitalisation stood at RM21.96 billion.