RHB Bank records RM570.9 million net profit in Q1 2020

RHB Bank Bhd recorded a net profit of RM570.9 million for the first quarter ended March 31, 2020 which is lower by 9.4 percent compared to last year due to lower non-fund based income and higher allowances for expected credit losses (ECL).

Its revenue fell by 3.5 percent to RM3.23bil from RM3.35bil a year ago and earnings per share were 14.24 sen compared with 15.72 sen.

RHB said their allowances for credit losses was at RM151.4 million, primarily due to higher allowances for ECL on loans which has included a RM50 million additional provision set aside in relation to Covid-19, as well as lower ECL writeback compared with the previous corresponding period for financial investments at amortised cost and financial assets at fair value through other comprehensive income.

The bank also said their non-fund based income was 9.3 percent lower at RM484.8 million due to the unrealised marked-to-market losses on the Group’s trading portfolio due to the movement in yield curve towards the end of March.

But, their operating expenses declined by 0.6 percent to RM841.5 million compared to the previous year as driven by disciplined cost management efforts in the current volatile market. Cost-to-income ratio improved to 48.2 percent from 48.6 percent a year ago.

Meanwhile, the bank said its gross loans and financing grew by 3.6 percent y-o-y to RM176.2 billion supported mainly by resilient growth in mortgages, small and medium enterprise (SME) and Singapore loans.

In addition, the bank’s domestic loans and financing grew 2.2 percent y-o-y and the group’s domestic loans’ market share stood at 8.8 percent as at end-March.

They continued to be prudent in loan loss provision with loan loss coverage standing at 107.6 percent as at end March 2020, according to the bank.

RHB Banking Group managing director Datuk Khairussaleh Ramli said the group’s underlying performance for 1Q reflects its resilience and strong fundamentals despite operating under an extremely tough and unprecedented economic environment.

“We can expect our financial performance to be affected in this financial year. However, we are confident that our healthy liquidity position and strong capital base will help us steer through these challenging times,” Khairussaleh said.

He added that RHB remains cautious, placing utmost importance in ensuring business continuity and providing  customers with all the support needed during these times.

To-date, the bank has approved almost RM1.3 billion in Special Relief Facility to approximately 2,000 SMEs to help alleviate the short-term cash flow difficulties faced by them arising from the Covid-19 pandemic.

“It is still early days for us to see the full extent of the COVID-19 pandemic implications, with estimates of the possible impact to the Group remaining very broad at this point but while we stay the course with our five-year strategy, FIT22, we will be reviewing our initiatives with the objective to prioritise key areas taking into account external opportunities and threats as well as internal capability and capacity,” he concluded.

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