RHB Q4 earnings soar

> Almost doubles on net forex gains and lower allowances for bad loans

PETALING JAYA: RHB Bank Bhd’s net profit for the fourth quarter ended Dec 31, 2017 almost doubled on gains in net foreign exchange and financial assets and investments as well as lower allowances for bad loans.

The group made a net profit of RM460.1 million for the quarter under review, compared with RM261.2 million for the corresponding quarter in 2016.

This was achieved on 5.7% higher revenue of RM2.7 billion, compared with RM2.6 billion for the same quarter in the previous year.

Net profit for the 12-month period was almost 16% higher at RM2.0 billion, compared with RM1.7 billion for the same period in 2016, largely driven by higher net funding income, lower loan loss impairment and lower impairment losses on other assets, partially offset by higher overheads and lower non-fund based income.

This was on almost flat revenue of RM10.6 billion for the quarter under review.

Net fund based income increased by 5.4% to RM4.6 billion year on year (yoy), mainly underpinned by growth in loans and prudent funding cost management. The efforts brought about a stable net interest margin (NIM) performance at 2.18% for the full year.

Non-fund based income declined 1.9% to record RM1.8 billion from lower net gain on derivatives, commercial/ investment banking fee income and insurance underwriting surplus.

However, the impact was partly compensated by higher brokerage income in line with better trading volumes, higher Treasury trading and investment income, increase in net wealth management fee income and higher net foreign exchange gain.

The group’s gross loans and financing grew by 3.7% y-o-y to RM160.1 billion. Domestic loans and financing grew 5.2% yoy with the group’s domestic loan market share up to 9.1% by end 2017 from 9.0% in 2016. The increase came mainly from mortgages and SME which grew 13.2% and 8.7% respectively, negated by a decline in corporate loans which is in line with the group’s strategy to rebalance its loan composition.

Customer deposits remained stable at RM166.2 billion as the group consciously released more expensive deposits. The continued strong growth of total current account and savings account (casa) at 18.8% over the year helped improve casa composition to 30.4% from 25.6% a year ago.

On Bursa Malaysia yesterday, RHB Bank closed up seven sen to RM5.47, on volume of 5.1 million shares.