. Total income grew 3.7% Y-o-Y to RM5,260.1 million
. Pre-tax profit rose 6.6% Y-o-Y to RM2,498.7 million
. Operating expenses increased by 2.6%, cost-to-income ratio at 48.5% from 49.0%a year ago
. Allowances for credit losses lower by 12.9% Y-o-Y
. Gross loans up 5.2% Y-o-Y to RM172.8 billion while domestic loans grew 5.1% Y-o-Y supported by a resilient growth in mortgages and SME
. Customer deposits increased 6.9% Y-o-Y to RM183.1 billion; CASA stood at 25.4% of total deposits
. Islamic financing grew 19.3% from a year ago and contributes 37.0% of total domestic loans and financing
. ROE at 10.2%
KUALA LUMPUR, Nov 25 -- RHB Bank Berhad (the Group) announced today its financial results for the first nine months ended 30September 2019.
• The Group reported a net profit of RM1,861.4 million, up 7.0% year-on-year (Y-o-Y) mainly from higher non-fund based income and lower expected credit losses(ECL).
• Gross fund based income increased by 6.4% Y-o-Y on the back of a 5.2% increase in gross loans and financing notwithstanding the OPR cut in May 2019. Funding and interest expense rose 12.4% Y-o-Ycollectively, due to the impact from the OPR hike in January 2018 and higher deposit base. As a result, net fund based income declined marginally by 0.6% Y-o-Yto RM3,677.4 million.
• Non-fund based income rose significantly by 15.3% Y-o-Y to RM1,582.7 million, contributed largely by highernet trading and investment income and insurance underwriting surplus.
• Operating expenses continue to be tightly managed,resulting in an improved cost-to-income (CIR) ratio of48.5% from 49.0% a year ago.
• Allowances for credit losses was RM210.7 million, 12.9% lower than the previous year, primarily due to lower ECL on loans and higher ECL writeback on financial assets.
• Annualised credit charge ratio improved to 0.18% compared with 0.20% over the same period a year ago.
Third Quarter 2019 Earnings Against Third Quarter 2018
• On a quarter Y-o-Y basis, net profit for the current quarter was at RM615.8 million, an increase of 6.4% from RM578.7 million recorded in the same quarter last year. This was attributable mainly to higher net fund based and non-fund based income and higher ECL writeback on other financial assets.
Balance Sheet & Capital Position Remained Robust
• Total assets for the Group increased by 3.7% from December 2018 to RM252.1 billion as at 30 September 2019. Shareholders’ equity stood at RM25.8 billion, with net assets per share at RM6.44.
• Our capital position remains strong; Common equity tier-1 (CET-1) and total capital ratio of the Group aftertaking into account the FY2019 interim dividend stoodat 16.46% and 18.96% respectively.
• The Group’s gross loans and financing grew by 5.2% Y-o-Y to RM172.8 billion, supported by growth notably in mortgages and SME, while Singapore loans grew by 7.4%. Domestic loans and financing grew 5.1% Y-o-Y.The Group’s domestic loans market share stood at 8.9% as at end-September 2019.
• Customer deposits recorded a 6.9% growth Y-o-Y to RM183.1 billion as at 30 September 2019, largely attributable to growth in fixed deposits. Liquidity coverage ratio (LCR) remained healthy at 127.4%.
• Total current and savings account (CASA) increased by 0.6% over the same period, with CASA composition at 25.4% of total deposits.
• Gross impaired loans was at RM3.7 billion as at 30 September 2019, with gross impaired loans ratio of 2.16% from 2.37% a year ago.
• We continued to be prudent in loan loss provision with loan loss coverage standing at 105.8% as at 30 September 2019.
Performance Review of Key Business Units
• Retail Banking
o Group Retail Banking reported a pre-tax profit of RM722.5 million for the first nine months of the year ended 30 September 2019.
o Retail loans and financing rose 7.6% Y-o-Y to RM88.9 billion, primarily driven by growth in mortgages.
o Retail deposits increased by 12.0% Y-o-Y to RM57.2 billion, mainly contributed by growth in fixed deposits.
• Group Business Banking
o Group Business Banking recorded a pre-tax profit of RM357.7 million in the first nine months of the year, a 28.3% increase mainly due to lower allowances for credit losses on loans and higher net fund based income.
o Gross loans and financing expanded by 4.4% Y-o-Yto RM26.0 billion, driven mainly by Retail SME portfolio at 6.7%.
o Customer deposits recorded a 16.4% growth Y-o-Yto RM28.6 billion, mainly contributed by growth in fixed deposits.
• Group Wholesale Banking recorded a pre-tax profit ofRM1,509.6 million, Group Corporate & Investment Banking registered a pre-tax profit of RM533.6 millionand Group Treasury and Global Markets recorded a pre-tax profit of RM975.9 million.
• RHB Bank Singapore recorded a pre-tax profit of SGD9.9 million while loans and advances increased 7.1% Y-o-Y to SGD4.1 billion and deposits grew by 12.3% Y-o-Y to SGD5.0 billion.
• Group International Business excluding Singapore registered a pre-tax profit of RM66.0 million.
• RHB Group’s Islamic Business recorded 32.5% Y-o-Y growth in pre-tax profit to RM551.8 million mainly due to lower ECL on financing and higher net fund based and non-fund based income.
o Gross financing continued to record robust growth at 19.3% Y-o-Y to RM57.6 billion.
o Islamic financing constitutes 37.0% of the Group’s total domestic gross loans and financing, up from 32.6% as at 30 September 2018.
Malaysia’s GDP grew 4.4% year-on-year in Q3 2019 from 4.9% in Q2 2019 as both exports and domestic demand moderated. GDP is expected to grow 4.5% for the full year of 2019 (2018: 4.7%) as global economic outlook continues to be affected by the protracted global trade tensions. For the banking sector, loans growth is expected to be slow, but supported by a resilient household sector and SMEs.
“The Group demonstrated resilience by delivering highernet profit for the first nine months of 2019, amidst challenging operating environment. We remain prudent in growing our business, while we continue to adoptmeasures to accelerate efforts to manage asset quality and exercise discipline in cost management, supported by our strong fundamentals.
We continue to make good progress in the execution of our FIT22 strategic roadmap, which includes investments in technology infrastructure and enhancing digital capabilities, as well as the adoption of the AGILE work culture across the Group, driven by our focus to serve our customers better,” said Dato’ Khairussaleh Ramli, Group Managing Director of RHB Banking Group.
“On the sustainability front, in recognition of our progress, the Group has been maintained as a constituent in the FTSE4Good Bursa Malaysia Index as at June 2019. At the same time, we were recently upgraded to AA rating from A rating in September 2019 by MSCI ESG Ratings,” added Dato’ Khairussaleh.