By FARA AISYAH / Pic By ISMAIL CHE RUS

RHB Bank Bhd’s net profit for the third quarter ended Sept 30, 2018 (3Q18) rose by 18.38% to RM578.69 million compared to a year ago, pushed by higher income from its Islamic banking business and lower allowances for credit losses.

Revenue of the country’s fifth-largest banking group also increased during the quarter by 8.1% compared to the corresponding quarter a year ago to RM3.2 billion.

For the first nine months of 2018 (9M18), RHB Bank’s profit rose by 16.78% to RM1.74 billion, while revenue improved by 6.71% to RM9.34 billion.

“Our profit for the 9M18 is our highest ever. We aim to boost performance and enhance our top-line growth, as well as deliver service excellence through our five-year FIT22 strategy, supported by our digital transformation programme focusing on providing value-added interactions and customised services based on differentiated segments,” said RHB Banking Group MD Datuk Khairussaleh Ramli (picture) in a statement yesterday.

The company is also scaling up the Agile way of working across the group, Khairussaleh said.

RHB Bank’s net fund-based income increased by 8.9% to RM3.7 billion from a year ago.

Gross fund-based income increased by 7.1% on the back of a 4% increase in gross loans and financing, while funding and interest expense rose 5.6% YoY.

Non-fund-based income recorded a 4% growth to RM1.4 billion, contributed largely by higher net foreign-exchange gain, and trading and investment income, partially offset by lower insurance underwriting surplus, brokerage income and capital-market related fee income.

Cost-to-income ratio also improved to 49% from 49.5% recorded a year ago. However, operating expenses rose by 6.4% to RM2.5 billion compared to a year ago due to higher personnel costs and IT-related expenses.

Allowances for credit losses on loans was 18.8% lower at RM245.7 million, largely due to certain recoveries recorded during the period, coupled with substantial impairment provided for oil and gas (O&G)-related companies in the corresponding period.

Annualised credit charge ratio stood at 0.2% compared to 0.26% over the same period last year.

Allowances for credit losses on other assets were significantly lower by RM125.2 million mainly due to improved ratings of investment portfolio and the absence of impairment provided for an O&G-related bond in Singapore.

The group’s total assets rose by 3.2% from December 2017 to RM237.5 billion as at 9M18, primarily due to increase in loans, securities portfolio and cash and short-term funds. Its shareholders’ equity stood at RM23.4 billion, with net assets per share at RM5.82.

The group’s gross loans and financing grew by 4% YoY and 2.6% year-to-date (YTD) to RM164.3 billion. Domestic loans and financing grew 4.6% YoY and 2.6% YTD, contributed mainly by resilient growth in mortgages, and small and medium enterprises, though negated by corporate repayments.

Meanwhile, customer deposits increased by 1.1% YoY and 2.7% YTD to RM171.4 billion.

RHB Bank’s total current and savings account composition stood at 26.9% as at 9M18.

Gross impaired loans were at RM3.9 billion for the 9M period, with gross impaired loans ratio at 2.37%. Loan loss coverage for the group, including regulatory reserves was at 104.2%.