PETALING JAYA: RHB Bank Bhd posted a net profit of RM621.01 million in the fourth quarter ended Dec 31, 2019, 9.8% higher compared with RM565.43 million in the same quarter a year ago, mainly due to higher net fund based and non-fund based income as well as the absence of one-off impairment on other non-financial assets.
The bank’s revenue grew 3.37% to RM3.42 billion from RM3.31 billion previously.
It has proposed a final dividend of 18.5 sen per share, bringing the total dividend to 31 sen per share for the year with the highest ever payout ratio 50.1%.
For the full-year period, RHB posted a net profit of RM2.48 billion, up 7.7% from RM2.31 billion in the previous year, thanks to higher net income, lower expected credit losses (ECL) for loans and higher writeback of impairment losses for financial assets.
Revenue was up 6.6% to RM13.53 billion from RM12.69 billion.
RHB said gross fund based income increased 5.2% on the back of a 4.3% increase in gross loans and financing, whilst funding and interest expense rose 9.2% due to the impact from the OPR hike in January 2018 and higher deposit base. As a result, net fund based income grew marginally by 0.4% to RM4.96 billion. Net interest margin for the financial year was 2.12%.
Non-fund based income rose 14.7% to RM2.14 billion, contributed largely by higher net trading and investment income, higher insurance underwriting surplus and higher capital market related fee income.
Allowances for credit losses was RM278.5 million, 9.0% lower than the previous year, primarily due to lower ECL on loans and higher ECL writeback on other financial assets. Full year credit cost improved to 0.18% from 0.19% a year ago.
Its common equity tier-1 and total capital ratio after the FY2019 final dividend stood at 16.27% and 18.59% respectively.
RHB’s gross loans and financing expanded 4.3% to RM176.2 billion supported by growth in all businesses, notably in mortgages and SME segment.
Gross impaired loans ratio improved to 1.97% from 2.06% a year ago with gross impaired loans at RM3.48 billion as at Dec 31, 2019. Loan loss coverage stood at 107.9%.
The group expects loans and financing growth for the local market to moderate slightly to 3.6%, supported by a resilient household sector.
“We expect 2020 business outlook to remain challenging. With the recent OPR cut and potentially further cuts, our net interest income would be adversely impacted. We are strengthening our efforts to mitigate any possible adverse effects to our asset quality,“ RHB group managing director Datuk Khairussaleh Ramli said in a statement.
