This article first appeared in The Edge Financial Daily, on January 15, 2016.

PETALING JAYA: RCE Capital Bhd, which saw its net profit jump 57% year-on-year in its six months ended Sept 30, 2015 (1HFY16), expects to post modest growth in its core loan financing segment for the current financial year ending March 31, 2016 (FY16) in light of the uncertain economic environment.

RCE Capital chief executive officer Loh Kam Chuin said the non-bank financial institution, which provides personal financing to government servants, sees slowing in its growth in FY16 due to a more stringent policy in approving loans.

This is despite the group’s net profit growing to RM19.65 million in 1HFY16 from RM12.52 million in 1HFY15, led by higher net interest income of RM6.8 million. Revenue also increased 21.9% to RM76.53 million from RM62.76 million a year ago.

“In line with concerns on high household debt, we will also have to play our part. So, yes, we definitely have to be more careful and we are looking at more quality loans,” Loh told reporters after the group’s extraordinary general meeting (EGM) yesterday.

He added that the non-performing loans will have to be managed.

“I think we cannot be in a position to be reckless in lending out because borrowers will always want to borrow. So, we just have to be careful. As mentioned, the economy is very uncertain and we too will have to be very cautious,” said Loh.

Nevertheless, Loh said RCE Capital, which is part of the Amcorp Group, has differentiated itself from competitors by delivering service to the satisfaction of its customers. This means more efficient and faster loan processes.

On the group’s efforts to secure access to the Central Credit Reference Information System, a comprehensive borrower database maintained by Bank Negara Malaysia, Loh said it’s “still ongoing”.

“Essentially, there is still a lot of checks and discussions to be done. As we mentioned before, we expect all these things to be ready by the end of this financial year.

“But then again, you’ll never know. We just want to make sure that everything is running smoothly. I think it must also to the satisfaction of the central bank as well,” he added.

RCE Capital had previously said that the availability of the borrowers’ credit information from CCRIS will assist the group in making informed lending decisions and further enhance its credit risk management.

Earlier in the EGM, RCE Capital shareholders unanimously approved the proposal for a capital repayment of up to about RM98.3 million or 7.5 sen per share. This would be done by way of a reduction of the issued share capital of RCE Capital, whereby the par value of each share would be reduced from 10 sen to 2.5 sen.

Immediately after the proposed share capital reduction, the group will undertake the proposed share consolidation involving the consolidation of every four ordinary 2.5 sen shares into one ordinary 10 sen share.

RCE Capital shares closed down 1.75% at 28 sen yesterday, bringing a market capitalisation of RM364.3 million.