RHB Bank Net Profit Growth At RM600m In Q122

Kuala Lumpur, 30 May 2022 — RHB Bank says it recorded a net profit of RM600.3 million according to its financial results for the first quarter ended March 31, 2022.

• The Group recorded a net profit of RM600.3 million for the first three months ended 31 March 2022. 

• Net fund based income improved to RM1,470.7 million driven by higher gross fund based income, which grew 2.7% year-on-year supported by loans growth of 7.0%. NIM for the quarter was 2.11% compared with 2.17% recorded in the corresponding period last year.

• Non-fund based income declined to RM432.7 million, primarily from lower fee income and net trading and investment income, offset by higher insurance underwriting surplus.

• Operating expenses declined to RM859.1 million. With positive JAWS, cost-to-income ratio improved to 45.1% compared with 46.0% a year ago. 

• Expected credit losses (ECL) reduced to RM153.8 million from lower ECL on loans. Correspondingly, the annualised credit charge ratio improved to 0.29% compared with 0.39% for the same period last year.

RHB Bank’s balance sheet & capital position

• Total assets for the Group increased 2.8% from December 2021 to RM297.6 billion as at 31 March 2022. Net assets per share was RM6.77, with shareholders’ equity at RM28.1 billion as at end-March 2022.

• Our capital position remains strong; the Group’s Common Equity Tier-1 (CET-1) and total capital ratio stood at 16.8% and 19.4% respectively.

• The Group’s gross loans and financing grew 1.4% year-to-date to RM201.3 billion, mainly supported by growth in mortgage, SME and Singapore. Domestic loans and financing grew 1.0% year-to-date. 

• Gross impaired loans was RM3.0 billion as at 31 March 2022 with gross impaired loans ratio of 1.50%, compared with 1.49% as of December 2021. Loan loss coverage ratio for the Group, excluding regulatory reserves, strengthened to 125.7% as at end-March 2022, compared with 122.4% in December 2021.

• Customer deposits increased 3.6% year-to-date to RM226.5 billion, predominantly attributed to fixed and money market time deposits growth of 5.1%. CASA composition stood at 29.0% as at 31 March 2022. Liquidity coverage ratio (LCR) remained healthy at 144.8%.

Performance Review of Key Business Units 

• Group Community Banking 

• Group Community Banking posted a pre-tax profit of RM401.5 million mainly due to higher net fund based income and lower operating expenses and ECL. 
• Gross loans and financing grew 1.8% year-to-date to RM126.4 billion, primarily driven by growth in mortgages (+2.3%) and SME (+3.3%).
• Deposits increased by 1.7% year-to-date to RM102.6 billion, mainly contributed by growth in fixed deposits (+3.2%).

Group Wholesale Banking 

• Group Wholesale Banking posted a pre-tax profit of RM473.6 million. 
• Gross loans and financing dipped marginally by 0.9% year-to-date to RM49.8 billion.
• Deposits increased 6.9% year-to-date to RM99.4 billion primarily from higher fixed and money market time deposits (+7.2%). 

• Group International Business posted a pre-tax profit of RM21.0 million.
  • RHB Bank Singapore reported a pre-tax profit of SGD1.3 million attributed to higher net fund based income and lower ECL. Gross loans and advances grew by 4.9% year-to-date to SGD6.6 billion, while deposits contracted marginally by 1.8% to SGD6.6 billion.
  • RHB Bank Cambodia reported a pre-tax profit of USD2.9 million. Gross loans and advances contracted by 2.6% year-to-date to USD661.2 million while deposits contracted by 5.8% to USD538.4 million. 

• RHB Insurance registered a pre-tax profit of RM25.0 million attributed to higher net investment income.

• RHB Islamic Bank recorded a pre-tax profit of RM255.1 million. 

• Gross financing grew 2.2% year-to-date to RM76.5 billion.
• Islamic business contributed 43.5% of the Group’s total domestic gross loans and financing, an improvement from 43.0% in December 2021.

Resilience

Economic recovery continues its positive momentum as Malaysia progressively transitions into the endemic phase following the reopening of international borders.

However, risks to economic growth remains which include a weaker-than-expected global growth, further escalation of geopolitical conflicts, worsening supply chain disruptions, and adverse developments surrounding COVID-19.

Domestically, the banking sector is projected to remain resilient with healthy capital and liquidity positions. On the monetary front, the OPR is expected to further increase in the second half 2022 towards a more normalised level. 

“The Group’s first quarter performance was commendable despite the challenging business environment. Our fundamentals remain solid and this is reflected by our strong capital ratio and liquidity levels. Our asset quality remains strong with healthy loan loss coverage of 125.7%.

“Going forward, we will remain prudent in managing the business and will focus on driving responsible growth, as well as managing our asset quality. We will also continue to provide the appropriate assistance to our customers who remain impacted by the COVID-19 pandemic.

“We anticipate stronger economic growth in FY2022, riding on the country’s high vaccination rate and the resumption of all economic activities. In light of this and to address the accelerated shifts in customer behaviour and preferences especially over the last couple of years, we have now launched our new 3-year strategy 2022 – 2024, ‘Together We Progress 24’, which will drive our ambition to be a leader in Service Excellence,” says Mohd Rashid Mohamad, Group Managing Director and Group Chief Executive Officer of RHB Banking Group. 

Key Financial Highlights