KUALA LUMPUR: RHB Bank Bhd’s net profit for the third quarter ended Sept 30, 2016 (3QFY16) jumped 120% to RM505.33 million from RM229.26 million a year ago, as it recorded lower other operating expenses with higher other operating income.

According to its income statement posted on Bursa Malaysia yesterday, other operating expenses fell 29% to RM826.53 million from RM1.17 billion, interest expense was also down 4% at RM1.07 billion from RM1.12 billion previously, while operating income climbed 24% to RM546.4 million from RM439.45 million.

Revenue for the period was about 2% higher, year-on-year (y-o-y), at RM2.7 billion compared with RM2.66 billion previously.

For the nine-month period ended Sept 30, 2016 (9MFY16), RHB’s net profit was up 9% y-o-y at RM1.42 billion from RM1.3 billion previously, while revenue gained 1% to RM8.13 billion from RM8.04 billion.

The stronger year-to-date (YTD) earnings were due mostly to “a strong growth in operating profit before allowances, though this was partly offset by an increase in impairment losses for loans and other assets”.

Included in the 9MFY16 results was a one-off full impairment on a corporate bond in Singapore of RM253.5 million that was incurred in 2QFY16, it said.

It also noted that a RM308.8 million career transition scheme (CTS) expense was logged last year, while it benefited from a collective allowances written back due to model refinement on mortgage portfolio which amounted to RM131.4 million.

“Excluding the effects of these one-offs, normalised net profit increased by 12.4%,” it said.

Meanwhile, its cost-to-income ratio improved to 49.9% compared with 54.6% (normalised, excluding CTS expense) a year ago.

Allowances for loans and financing, however, climbed to RM286.4 million from RM105.88 million, primarily due to higher individual impairment provided on certain corporate accounts, besides the absence of the previously mentioned one-off collective allowances written back.

Operating profit before allowances, meanwhile, increased by 36% to RM2.42 billion in 9MFY16, underpinned by what RHB said was healthy net fund-based and non-fund-based income growth, and effective cost management.

YTD, gross loans recorded a 1.4% annualised growth to RM152.9 billion, and at 2.3% y-o-y, mainly due to mortgages and small- and medium-sized enterprises, despite a decline in corporate loans.

Customer deposits increased at an annualised rate of 6.6% to RM166 billion, while total current and savings accounts (Casa) showed an annualised growth of 9.9%. Casa composition also improved to 24.5% as at Sept 30 from 24% in December 2015.

RHB Banking Group managing director Datuk Khairussaleh Ramli said 3QFY16 results showed significant improvement with its core earnings remaining resilient, despite the group’s performance having been affected by one large impairment on securities and allowances on certain corporate accounts amid sluggish global economic environment.

Going ahead, he expects the Malaysian banking sector’s growth to remain modest.

“The group will continue to implement various initiatives under our Reframed Strategy. To date, we have registered significant positive outcomes and will remain vigilant by focusing on asset quality.

“We will continue to improve our operational efficiency and maintain a high level of liquidity and capital. At the same time, focus on digitisation of our core businesses and customer experience will be enhanced as part of our strategy to achieve our long-term objectives,” he added.

Separately, RHB appointed former UEM Group Bhd chief financial officer (CFO) Syed Ahmad Taufik Albar, 43, as its new CFO, with effect from Dec 1, to replace outgoing CFO Yap Choi Foong, who is quitting to pursue other opportunities. Taufik was the CFO of UEM from November 2013 to October this year.