KUALA LUMPUR – RHB Bank Berhad (the Group) announced on 30 November its financial results for the first nine months ended 30 September 2020.
The Group recorded a net profit of RM1,593.9 million, a decrease of 14.4% from the corresponding period last year, mainly due to net modification loss of RM392.4 million arising from the moratorium given to our customers and higher allowances for credit losses.
Net fund based income increased by 1.7% year-on-year to RM3,736.1 million driven by proactive management of funding costs, which dropped 19.3% year-on-year, supported by an increase in CASA composition from 25.4% to 31.3% and the redemption of certain Hybrid Tier-1 Capital and sub-debt instruments over the course of 2019 and 2020.
NIM for the quarter dropped to 1.99% compared with 2.13% for the same period last year mainly from the impact of OPR cuts.
The Group’s profit before tax excluding discontinued operations dropped 6.4% year-on- year to RM789.9 million for the third quarter of 2020 mainly due to higher allowances for credit losses on loans and other financial assets, and operating expenses, offset by higher non-fund based income.
Our capital position remains strong; Common Equity Tier-1 (CET-1) and total capital ratio of the Group stood at 16.42% and 18.25% respectively. The Group’s gross loans and financing grew by 5.6% year-on-year to RM182.4 billion, mainly supported by growth in mortgages, SME and Singapore. Domestic loans and financing grew 4.7% year-on-year. The Group’s domestic loan market share stood at 9.0% as at end-September 2020.
Gross impaired loans was RM3.1 billion as at 30 September 2020, with a gross impaired loans ratio of 1.69% compared with RM3.5 billion and 1.97% as at 31 December 2019. Loan loss coverage ratio for the Group, excluding regulatory reserves, stood at 108.3% as at end-September 2020.
Group Retail Banking reported a 1.9% year-on-year decline in pre-tax profit to RM754.4 million for the period ended 30 September 2020. This was mainly due to lower non-fund based income and higher allowances for credit losses on loans.
Group Business Banking recorded a 26.4% year-on-year decline in pre-tax profit to RM263.3 million for the period ended 30 September 2020 due to higher allowances for credit losses on loans and lower non-fund based income.
Gross loans and financing expanded by 8.0% year-on-year to RM28.1 billion, driven by growth in SME and Commercial portfolios of 9.0% and 4.5% respectively. Deposits grew 15.7% year-on-year to RM33.1 billion attributed to growth in current account and fixed deposits.
Group Wholesale Banking posted a pre-tax profit of RM1,459.2 million, reduction of 2.2% from the previous year. Group Corporate and Investment Banking registered a pre-tax profit of RM509.9 million, a 1.3% decrease on the back of higher expected credit losses on loans and other financial assets.
Group Treasury and Global Markets recorded a 2.7% decrease in pre-tax profit to RM949.3 million over the year, mainly due to lower net fund based income, lower net gain on foreign exchange and derivatives, and lower expected credit losses written back on financial assets.
RHB Islamic Bank recorded a pre-tax profit of RM284.6 million. Gross financing recorded a robust double digit growth of 15.0% year-on-year to RM66.3 billion. Islamic business contributed 40.6% of the Group’s total domestic gross loans and financing, up from 37.0% a year ago.
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