Kenanga Investment Bank delivers strong performance
LUMPUR: Kenanga Investment Bank Berhad (Kenanga Group) announced higher earnings for the financial year ended Dec 31, 2023 (FY23), with revenue of RM821.1 million, a 13.5 per cent increase from the year before, and a higher profit before tax (PBT) of RM88.1 million, reflecting an 18.8 per cent growth compared to the preceding year.
Net profit rose to RM72.8 million, a 31.4 per cent surge from the previous year. The improved performance was primarily driven by higher trading and investment income, increased management fee income, higher bad debt recoveries, and higher share of profit from associates.
“2023 proved to be another testing period for the world economy as headwinds from the previous year lingered, accompanied by escalating geopolitical tensions, high inflation, sluggish growth, and turbulent financial markets,” remarked Datuk Chay Wai Leong, group managing director, Kenanga Investment Bank Berhad.
“Amid these challenges, the Group delivered another strong year – showcasing strength derived from agility, and a diversified range of our businesses.”
The group’s stockbroking division experienced a positive upturn with revenue rising 10.8 per cent from the previous year to RM308.5 million while PBT stood at RM16.1 million, exceeding a six-fold increase from the previous year.
The division’s results were attributed to higher trading and investment income, as well as net brokerage fee which was consistent with the improved sentiment on Bursa Malaysia that saw a 24.5 per cent upswing in the group’s trading volume and a 7.1 per cent increase in trading value for the year.
Additionally, the stockbroking division was also bolstered by the reversal of credit loss expense for margin clients, as well as bad debt recoveries.
Its Asset and Wealth Management division delivered its best performing year yet, registering a jump in both revenue and PBT for FY23, with a 9.6 per cent increase in revenue to RM264.6 million, and an 8.3 per cent increase in PBT to RM58.7 million relative to the year before.
This result was underpinned by an increase in management and performance fee income from both alternative investment products, as well as institutional and private mandate portfolios. Its AUA also registered a strong closing at RM21.7 billion in FY23.
Kenanga Group’s listed derivatives business attained its highest profits in over a decade, with an increase in revenue to RM23.9 million from RM20.9 million in FY23, while PBT tripled to RM6.3 million compared to the previous year.
This strong result is propelled by higher interest income driven by the heightened interest in derivative products spurred by market volatility, as well as higher interest rate.
Its investment banking business registered a growth in revenue of RM224.0 million in FY23, in comparison to the revenue of RM189.6 million in the previous year, although PBT dipped to RM5.7 million against RM15.8 million in FY22 due to lower net interest income from compressed interest margins and credit loss provisions.