KUALA LUMPUR (May 30): Kenanga Investment Bank Bhd (Kenanga IB) (KL:KENANGA) saw its net profit fall by 57.2% to RM9.77 million in the first quarter ended March 31, 2025 (1QFY2025) from RM22.83 million a year earlier, largely due to last year’s substantially higher share of associate's profit, although this was partially mitigated by lower credit expenses during the current quarter.

On March 25, Kenanga IB disposed of its entire 45% stake in Kenanga Investment Corp Ltd for RM517,000. The disposal resulted in a net loss of RM99,000 to the group.

This resulted in lower earnings per share of 1.34 sen for 1QFY2025, compared with 3.15 sen for 1QFY2024.

This was despite a 2.6% increase in revenue to RM209.61 million in 1QFY2025 from RM204.21 million a year earlier, mainly due to higher interest income.

No dividend was declared for the current quarter.

The group has five major operating divisions, namely investment banking, stockbroking, listed derivatives — futures broking, asset and wealth management, and corporate and others.

In a filing with Bursa Malaysia on Friday, Kenanga IB said its investment banking operating segment registered a pre-tax profit of RM4.15 million in 1QFY2025, compared with a pre-tax loss of RM2.11 million in 1QFY2024, mainly due to higher trading and investment income as well as interest income.

For its stockbroking division, subdued trading activity on the local bourse led to lower brokerage income generated for 1QFY2025. The segment saw its pre-tax loss widen to RM4.64 million from RM1.25 million a year earlier. It also recorded a slightly higher credit loss in 1QFY2025, although this was partially mitigated by higher interest income generated.

As for its asset and wealth management operating segment, increase in overheads resulted in a lower pre-tax profit of RM5.8 million in 1QFY2025, down 23.6% from RM7.6 million a year earlier.

On its outlook for 2025, Kenanga IB said its priorities remain focused on strengthening recurring income streams, optimising cost efficiencies and diversifying product offerings.

“Malaysia enters 2025 navigating a more complex global landscape, shaped by evolving geopolitical dynamics, shifting trade policies and volatile international markets. Recent developments such as the easing of the US-China trade tensions and stronger investor sentiment may offer a more constructive operating environment,” said Kenanga IB group managing director Datuk Chay Wai Leong in a separate statement.

“With a strong focus on digital innovation, we are scaling our core businesses and enhancing customer engagement through technology-driven solutions that simplify and elevate the financial services experience. Kenanga Group is well-positioned to capture emerging opportunities and create lasting value for stakeholders,” he added.

Kenanga IB shares closed down one sen or 1.09% to 91 sen on Friday, giving it a market capitalisation of RM669.5 million. The stock has slipped 1.09% so far this year.