RHB posts record quarterly earnings

> Net profit of RM590.8m in first three months of 2018, thanks to higher net income and lower allowance

PETALING JAYA: RHB Bank Bhd recorded the best quarterly performance ever for the first quarter ended March 31, 2018 with a net profit of RM590.82 million, 18.1% higher than the RM500.28 million made in the previous corresponding period, thanks to higher net fund-based and nonfund-based income as well as lower allowance for expected credit losses. The bank’s revenue rose 6.1% to RM2.78 billion from RM2.62 billion.

It told Bursa Malaysia that net fund based income increased 13% to RM1.23 billion, while gross fund based income grew 6.1% underpinned by growth in loans and financing.

Net interest margin for the quarter improved to 2.28%.

Non-fund based income was 15.7% higher at RM534.5 million, contributed largely by higher net foreign exchange gain and higher trading and investment income, partially offset by lower insurance underwriting surplus and lower brokerage income.

RHB’s gross loans and financing expanded 4.3% to RM161.2 billion, with domestic loan market share standing at 9.1% as at end-March 2018.

Gross impaired loans was at RM3.7 billion, while gross impaired loans ratio reduced to 2.29% from 2.39% as at end-March 2017. Loan loss coverage for the group, including regulatory reserves improved to 107.4%.

Allowances for credit losses was lower by 15.8% at RM114.5 million, in the absence of one-off impairment provided for certain corporate accounts relating to the oil and gas industry in the corresponding period last year.

RHB said its common equity tier-1 and total capital ratio after the proposed final dividend remained strong even after the implementation of MFRS 9 at 13.5% and 16.7% respectively.

Looking ahead, RHB group managing director Datuk Khairussaleh Ramli said it is targeting to grow top line, especially from the key growth areas amid improvement in fundamentals with loan loss coverage exceeding 100% as well as robust capital levels, healthy liquidity position and normalisation of credit cost.