KUALA LUMPUR (May 24): RCE Capital Bhd (KL:RCECAP) said it anticipates higher financing demand in its financial year ending March 31, 2025 (FY2025) in line with the planned increase in civil servant salaries.

“The group will continue to steer its business guided by responsible financing and customers’ experience, in addition to leveraging on sales and marketing campaigns and technology,” said RCE, which mainly provides consumer financing to government employees.

In its bourse filing on Friday, the group said it expects to remain profitable in FY2025.

Earlier this month, Prime Minister Datuk Seri Anwar Ibrahim announced a hike of more than 13% in civil servant salaries, with a minimum income level of RM2,000, effective December 2024. This increase would cost the government an additional allocation of over RM10 billion.  

For FY2024, RCE's net profit was flat with a 0.2% decline to RM138.75 million versus RM138.78 million in the previous year, while revenue rose 5.6% to RM341.66 million from RM323.63 million.

Net profit for 4QFY2024 dropped 16.6% to RM29.06 million from RM34.84 million a year earlier, on the back of higher operating expenses.

The higher costs came in the form of higher facility fees relating to new fundings secured, sales and marketing expenses as well as financing recovery activities.

“The group’s allowances for impairment loss on receivables was also higher primarily due to the increase in non-performing financing,” the group added.

Quarterly revenue was steady with a 0.2% dip to RM82.46 million from RM82.65 million previously.

RCE declared a second interim dividend of seven sen per share, payable on June 27.

Shares in RCE ended one sen or 0.32% higher at RM3.11, valuing the group at RM2.3 billion.