RHB Bank Q121 earnings up on higher net funding and non-funding income

by PRIYA VASU / pic by BLOOMBERG

RHB Bank Bhd’S net profit rose 13.9% to RM650.39 million in the first quarter ended March 31, 2021 (Q121), compared to RM570.9 million a year earlier due to higher net fund-based and non-fund based income.

Revenue for the quarter under review slipped to RM2.91 billion versus RM3.21 billion previously while basic earnings per share rose to 16.22 sen from 14.24 sen before.

In a filing to Bursa Malaysia today, the bank said the year-on-year earnings improvement was mainly due to higher net funding income and higher non-funding income, partially offset by higher allowances for credit losses, higher operating expenses and net modification loss for the period.

Net fund based income increased by 12.6% year-on-year to RM1.4 bil driven by proactive funding cost management, which dropped 36.4% year-on-year supported by CASA growth of 25.6%.

Non-fund based income rose by 15.5% to RM543.6 million, contributed largely by higher capital market, brokerage, wealth management and commercial banking fee income.

“The Group remained prudent and continued setting aside additional provisions to cater for potential adverse impact to asset quality,” said RHB.

Consequently, allowance for credit losses increased by 15.4% from the previous corresponding period to RM173.9 million with the annualised credit charge ratio standing at 0.39% compared with 0.34% last year.

Total assets of the Group increased by 3.5% from December 2020 to RM280.5 billion as at 31 March 2021.

Gross impaired loans was RM3.1 billion as at 31 March 2021, with gross impaired loans ratio of 1.66% compared with RM3.5 billion and 2.00% respectively as at 31 March 2020.

Loan loss coverage ratio for the group, excluding regulatory reserves remained strong at 119.5% as at end-March 2021.

The group’s gross loans and financing grew by 6.8% year-on-year to RM188.2 billion, mainly supported by growth in mortgage, auto finance, SME and Singapore.

Domestic loans and financing grew 6.0% year-on-year.

The Group’s domestic loan market share stood at 9.0% as at end-March 2021.

Customer deposits increased by 12.4% year-on-year to RM218.0 billion, predominantly attributed to CASA and fixed deposits growth of 25.5% and 7.8% respectively.

CASA composition stood at 30.6% as at 31 March 2021.