RHB Bank posts first quarter net profit of RM500.3m

PETALING JAYA: RHB Bank Bhd’s net profit declined 11.4% to RM500.3 million in the first quarter (Q1) ended March 31, 2017, from RM564.9 million in the previous corresponding quarter, mainly due to lower total income and higher impairment losses for loans.

Revenue was slightly down by 3.4% to RM2.62 billion, compared with RM2.71 billion in the same period last year.

In a statement yesterday, the bank said retail banking remained the biggest contributor to the group and it reported a pre-tax profit of RM257.5 million for the first three months ended March 31, 2017, 12.6% lower from the previous year’s corresponding quarter.

RHB said this was mainly attributed to lower net fund-based income, partially offset by lower operating expenses.

Retail loans and financing were marginally higher at RM70.5 billion as at March 2017, as growth in mortgages was largely offset by the decrease in auto financing and loans for purchase of securities.

Mortgage loans grew at a strong annualised rate of 14.6%, resulting in an improvement in market share to 8.7% from 8.6% as at December 2016.

Nevertheless, it said operating expenses for the first three months rose by a marginal 1.9% to RM761.2 million from a year ago, driven by a rise in personnel costs and higher IT-related expenses as the group continued to invest into technology infrastructure and capabilities.

As at March 31, 2017, total assets decreased by 1.3% to RM233.5 billion while shareholders’ funds for the group increased to RM22.3 billion, it added.

However, it said total current and savings account (CASA) registered a strong growth of 14.5% over the year, with CASA composition improving to 26.2% as at March 31, 2017, from 25.6% recorded in December 2016.

The group said loan-to-deposit ratio also remained healthy at 93.2%.

The group’s managing director Datuk Khairussaleh Ramli said the bank expects a better performance this year compared to 2016, as it remains vigilant to any headwinds in the operating environment.

“Our SME and Islamic banking portfolios have maintained their strong performance for the first quarter of 2017, whilst our CASA composition continues to strengthen,” he said.

Khairussaleh said the group will continue to pursue selective growth whilst managing asset quality and enhancing productivity.