KUALA LUMPUR: Lower non-fund based revenue and higher operating expenses weighed on RHB Bank Bhd’s second quarter profits, which fell 9.48% YoY (YOY) to RM634.83 million.
This brought net profit for the first six months of the year to RM1.24 billion, down 8.62% from the same period last year.
Earnings per share for 1HFY22 was 29.77 sen versus 33.71 sen previously.
Revenue for the quarter under review was at par at RM2.99 billion compared to RM2.93 billion in the comparative quarter. During the six-month period, revenue was slightly higher at RM5.84 billion compared to RM5.83 billion a year earlier.
According to the group’s managing director and CEO, Mohd Rashid Mohamad, the group’s performance has held up despite the difficult macroeconomic environment.
“This was supported by strong fundamentals given our strong capital base, healthy liquidity position and adequate loan loss coverage.
“We nevertheless remain alert to the uncertainty surrounding the pace of economic recovery and will continue to maintain our cautious stance while closely monitoring the quality of our assets,” he said in a statement.
He added that the group declared an interim dividend of 15 sen per share, comprising a cash payment of 10 sen and an eligible part of five sen under the dividend reinvestment plan.
For the first half of 2022, the banking group said non-fund based revenue decreased to RM816.2 million mainly due to lower fee income and net trading and investment income.
However, he said this was partially offset by an improvement in fund-based net income to RM3.03 billion, driven by a 6.7% increase in fund-based gross income on loan growth. by 7.3%.
Operating expenses were slightly lower at RM1.75 billion, although lower revenues negatively impacted the cost-to-income ratio which fell to 45.4% from 44.5% a year earlier early.
Expected Credit Losses (ECLs) were reduced to RM192.4 million due to lower ECLs on loans.
As a result, the annualized credit expense ratio improved to 0.16% compared to 0.42% for the same period last year.
At end-June 2022, RHB’s Common Equity Tier 1 (CET-1) ratio and total capital ratio stood at 16.6% and 19.2%, respectively.
The group’s gross loans and financings increased by 3.2% year-to-date to RM204.9 billion, mainly supported by growth in mortgages, auto finance, SMEs and Singapore. Domestic loans and financing have increased by 2.3% since the beginning of the year.
Gross impaired loans were RM3.3 billion in June 2022 with a gross impaired loan ratio of 1.62%, compared to RM3 billion and 1.5% respectively in March 2022, and RM3 billion and 1 .49% respectively in December 2021.
The group’s credit loss coverage ratio, excluding regulatory provisions, remains solid at 117% at the end of June 2022, compared to 122.4% in December 2021.
Customer deposits increased by 3.3% year-to-date to RM225.9 billion, mainly due to growth of 4.2% in fixed term and money market deposits.
CASA’s composition stands at 29.3% as of June 30, 2022. The Liquidity Coverage Ratio (LCR) remains solid at 140.9%.