KUALA LUMPUR (May 26): RHB Bank Bhd’s net profit surged 31% to RM761.67 million for the first quarter ended March 31, 2023 (1QFY2023) from RM582.33 million a year ago, largely thanks to higher non-fund based income and lower expected credit loss.
Its earnings per share rose to 17.93 sen from 14.06 sen, its Bursa Malaysia filing on Friday (May 26) showed.
Revenue swelled 39.57% to RM3.92 billion, from RM2.81 billion in 1QFY2022.
RHB Bank said its non-fund-based income rose by 39.7% to RM534 million, contributed by higher net gain on foreign exchange and derivatives, and higher net trading and investment income.
Its allowance for credit losses was at RM46 million, 70.1% lower than previous year, from lower expected credit losses on loans and net writeback for expected credit losses on securities. The bank added that its annualised credit charge ratio was at 0.1% compared to 0.29% last year.
Meanwhile, RHB Bank’s net fund-based income in 1QFY2023 declined by 6.6% to RM1.37 billion from a year ago, driven by higher funding expenses. The bank said the higher funding cost was attributed mainly to fixed deposits growth of 9.9% year-on-year (y-o-y).
“Net interest margin (NIM) for the quarter was 1.9%, compared with 2.16% recorded in the corresponding period last year,” the group said.
In 1QFY2023, RHB Bank said operating expenses also increased by 3.1% from a year ago to RM856.5 million, mainly from higher establishment, marketing, and administration and general costs. It said cost-to-income ratio was at 44.9% compared with 44.8% a year ago.
“Total assets of the group increased by 0.5% from December 2022 to RM312.4 billion as at March 31, 2023. Net assets per share was at RM7.04, with shareholders’ equity (standing) at RM29.9 billion as at March 31, 2023,” it said.
“Our capital position remained strong; the group’s Common Equity Tier-1 (CET-1) and total capital ratio stood at 16.9% and 19.7% respectively.”
RHB Bank’s gross loans and financing grew 6% y-o-y to RM213.4 billion, mainly supported by growth in mortgage, auto finance, small and medium-sized enterprises, and Singapore. Domestic loans and financing grew 4.7% y-o-y.
RHB Bank said customer deposits remained stable at RM226.4 billion, with current account and savings account (Casa) decreasing by 2.9% y-o-y, offset by growth in fixed deposits and money market time deposits by 1.2%. Casa composition stood at 28.1%, while liquidity coverage ratio remained sound at 147.3%, as at end-March.
“Gross impaired loans were at RM3.4 billion as at March 31, 2023, with gross impaired loans ratio of 1.59%, compared with RM3 billion and 1.5% at March 31, 2021. Loan loss coverage ratio for the group, excluding regulatory reserves, remained strong at 109.4% as at end-March,” it said.
In a separate statement on Friday, RHB Bank’s group managing director and group chief executive officer Mohd Rashid Mohamad said the group remains focused on strengthening its balance sheet and will continue to uphold its strong capital and liquidity positions.
He highlighted that RHB Bank is on track to achieve its 2026 aspirations under its sustainability strategy and roadmap, with a cumulative achievement of more than RM14 billion in sustainable financial services, equivalent to 73% of the group’s 2026 target of RM20 billion.
At noon break on Friday, share price of RHB Bank settled a sen or 0.18% lower to RM5.45, valuing the group at RM23.36 billion.