RHB’s first nine months of financial year 2021 results beat expectations
KUCHING: RHB Bank Bhd’s (RHB) first nine months of the financial year 2021 (9MFY21) financial performance was generally viewed as stronger than expected with its normalised profit after tax, amortisation and minority interest (PATAMI) of RM2.15 billion exceeding analysts expectations.
In a report, the research team at Kenanga Investment Bank Bhd (Kenanga Research) noted that the positive deviation was due to better-than-expected loans growth, non-interest income (NOII) and cost income ratio (CIR).
However, it noted that 4QFY21 could see some concentrated provisions.
“Management appears confident that its FY21 targets will be duly achieved; having gained noticeable ground in its loans mix while still sustaining healthy current account savings account (CASA) levels to keep cost of funds low.
“However, the group is cautious that URUS may call for bumps in its impairment allowances and hence raise their credit cost guidance to 40 to 45bps (from 40bps).
“For the time being, the group has accumulated management overlays of RM564 million year to date (YTD) which should serve as a solid buffer against any uncertainties that could arise, more recently from new Covid-19 variants,” Kenanga Research said.
Meanwhile, the research team at MIDF Amanah Investment Bank Bhd (MIDF Research) highlighted that RHB has improved its asset quality as it managed to reduced its gross impaired loans (GIL) ratio to 1.32 per cent (-31bps q-o-q) via write-offs and recoveries for non-retail borrowers.
“This is slightly below the industry average of 1.57 per cent. GIL ratio improved most segments: the only exceptions were auto finance and the Cambodian portfolio,” it noted.
It also pointed out that the group boasted an impressive loan growth of 6.7 per cent y-o-y, largely as result of excellent growth in overseas, SME and mortgage segments.
RHB attributes three main pillars of growth which are; aggressively using branches to sell mortgages (beforehand they were used only for referrals), loans for corporate activity including advisory and M&A (this is expected to taper in the following quarter), and solid showings from the SME segment.