KIBB’s 3Q21 earnings slip on lower trading activity


KENANGA Investment Bank Bhd’s (KIBB) net profit fell to RM21.4 million for the third quarter ended Sept 30 (3Q21) from the RM49.2 million profit it made in 3Q20, as its top line fell due weaker trading activity. 

KIBB’s revenue for the quarter fell to RM202.6 million from RM321 million in 3Q20 due to lower net brokerage and trading and investment income, partially mitigated by higher management fee income. 

Net profit for the nine months period ended Sept 30, 2021 (9M21), stood at RM86.5, up 37.4% year-on- year (YoY). 

Year-to-date net income stood at RM586.3 million, or 1.4% higher YoY, while operating expenses decreased marginally to RM490.7 million. 

KIBB’s annualised return on equity based on 9M21 is at 11.3% compared to 9% for 9M20.

The strong earnings for 9M21 were mainly due to a higher contribution from stockbroking and investment management businesses, as well as share of profits from the joint venture with Rakuten Trade Sdn Bhd, the bank noted in its exchange filing yesterday. 

KIBB’s stockbroking division achieved a pre-tax profit of RM68.8 million for 9M21 vis a vis RM52.7 million from the same period last year, mainly due to higher net interest, improved net trading and investment income, as well as lower credit loss expenses. 

Net equity trading investment income increased to RM56 million, up 40.2% YoY. 

“The division continued to grow its market share, particularly in the retail segment, from 21.9%, to 23.5%, reinforcing its position as one of the largest retail brokers in the marketplace. 

“During the same period, Rakuten Trade achieved yet another milestone, with the fast-growing online trading platform surpassing 200,000 registered accounts,” KIBB noted in a separate statement. 

The bank’s Investment and Wealth Management division registered a record high pretax profit which surged over three times to RM20.6 million in the nine-month period compared to RM7.6 million in 9M20. 

The increase was attributed to higher performance fee and management fee income generated on the back of increased assets under administration (AUA) and sales agency force. The group’s AUA stood at RM16.3 billion, up 18.4% from the same period last year. 

“With the gradual reopening of all economic sectors and lifting of restrictions, underpinned by the progress of Covid-19 vaccination campaign, deployment of stimulus measures and the unleashed pent-up demand, we remain cautiously optimistic of the country’s economic outlook into the new year,” said Datuk Chay Wai Leong (picture), the group MD of KIBB. 

He added that the trading activities on Bursa Malaysia are decelerating and will likely impact the bank’s following quarter performance. But Chay remains optimistic the investment bank is on track to conclude the year on a footing comparable to its performance last year.