RHB’s Q3 net profit up more than twofold
KUALA LUMPUR: RHB Bank Bhd’s net profit for the third quarter ended Sept 30, 2016 jumped over twofold to RM505.33 million from RM229.26 million in the corresponding period last year due to lower other operating expenses from reduced personnel costs and higher other operating income.
Revenue rose 1.6% to RM2.70 billion from RM2.66 billion a year ago.
For the nine months ended September 2016, RHB reported a net profit of RM1.42 billion, an increase of 9.1% over the previous year’s corresponding period, mainly attributed to strong growth in operating profit before allowances, though this was partly offset by a jump in impairment losses for loans and other assets.
Included in the current period results was a one-off full impairment on a corporate bond in Singapore of RM253.5 million incurred in the second quarter ended June 2016. In 2015, the group incurred a career transition scheme expenses of RM308.8 million and benefited from a collective allowances written back due to model refinement on mortgage portfolio amounting to RM131.4 million. Excluding the effects of these one-offs, normalised net profit increased by 12.4%.
The group’s operating profit before allowances in the first nine months of 2016 was underpinned by healthy net fund-based and non-fund-based income growth and effective cost management.
RHB said the Malaysian banking sector’s growth will remain modest. Corporate loan growth is expected to be lower and there is ongoing consolidation in the household loan segment. The financial and capital market is expected to be softer and rising pressure on liquidity and asset quality will affect the banking sector.
RHB group managing director Datuk Khairussaleh Ramli said Q3 results showed significant improvement from the previous year’s corresponding quarter.
“Despite our performance being affected by one large impairment on securities and allowances on certain corporate accounts, against thebackdrop of a sluggish global economic environment, our core earnings have remained resilient.”