RHB Capital 1Q15 gains 5.7 per cent to RM476.3 million

0

KUCHING: RHB Capital Bhd (RHB Capital) net profit in the first quarter of 2015 gained 5.7 per cent year-on-year (y-o-y) to RM476.28 million.

The banking group in a filing to Bursa Malaysia yesterday said revenue in 1Q15 also went up by 12.4 per cent y-o-y to RM2.69 billion.

Meanwhile, RHB Capital in a press statement said the higher earnings achieved was on the back of 2.9 per cent total income growth and lower loan impairment charges, partially offset by higher operating expenses and lower impairment write back on other assets.

RHB Capital noted that its net fund base income grew by 2.1 per cent y-o-y. Its gross fund base income increased by 16.7 per cent on the back of 13.7 per cent y-o-y growth in gross loans and financing.

Nonetheless, RHB Capital observed that its funding and interest expense was higher by 29.5 per cent due to higher customer deposits base by 10.8 per cent y-o-y as well as interest expense on new issuance of RM500 million sukuk issued on May 15, 2014, RM1.0 billion sub-debts issued on July 8, 2014 and US$300 million senior unsecured notes issued on October 3, 2014.

Additionally, the financial institution said its net interest margin dipped slightly to 2.22 per cent in 1Q15 compared to 2.26 per cent in 4Q14.

Furthermore, RHB Capital said other operating income recorded growth of 2.9 per cent to RM506.5 million attributed to higher investment income, higher insurance underwriting surplus and net gain on revaluation of derivatives, partially offset by lower fee income.

RHB Capital revealed that the group’s other operating income to total income ratio stood at 33.6 per cent.

Moreover, RHB Capital noted the group’s gross loans and financing grew by 0.7 per cent quarter-on-quarter (q-o-q) and 13.7 per cent y-o-y to reach RM143.5 billion.

The banking group pointed out that excluding one large corporate repayment during the quarter, its gross loans growth would have grown by 2.2 q-o-q.

Nonetheless, it observed that the loan growth was broad based, predominantly from purchase of residential and non-residential properties, working capital and purchase of securities.

RHB Capital said its domestic market share stood at 9.5 per cent as at March 31, 2015.

RHB Capital disclosed that its gross impaired loans ratio stood at two per cent as at March 31, 2015 which was stable compared to December 2014.

Commenting on RHB Capital’s latest financial performance, RHB Banking group managing director Datuk Khairussaleh Ramli said, “The first quarter of the 2015 financial year saw challenges emanating from the global economic environment and we expect the full year to remain the same.

“Nevertheless, we are pleased that our business operations have been resilient and continued to show reasonable top line growth.

“Our IGNITE 2017 Transformation Programme has continued to gain good traction in the first quarter and the group’s key priority is on executing prioritized set of initiatives under IGNITE 2017 to support our growth agenda for the rest of the year.

“In addition, given the current challenging operating condition, the group will put extra focus on managing overhead and funding costs, return on risk adjusted capital and asset quality.

“The group’s 2015 performance is expected to be better than 2014,” he believed.