KUALA LUMPUR, May 30 — RHB Bank Bhd’s net profit declined to RM600.27 million in the first quarter (Q1) ended March 31, 2022, from RM650.29 million in the same period last year.

However, the group reported a better pre-tax profit of RM890.55 million for the first three months compared with RM863.96 million a year earlier mainly due to higher net funding income, lower modification loss, lower operating expenses and lower allowances for credit losses, offset by lower non-fund based income.

Meanwhile, revenue slid to RM2.86 billion from RM2.90 billion previously, it said in a filing with Bursa Malaysia today.

In a media statement, group managing director and group chief executive officer Mohd Rashid Mohamad said the Q1 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 per cent.

"Going forward, we will remain prudent in managing the business and will focus on driving responsible growth, as well as managing our asset quality,” he said.

Mohd Rashid said the bank will also continue to provide the appropriate assistance to customers who remain impacted by the COVID-19 pandemic.

He said the bank anticipates stronger economic growth in the current financial year, 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 three-year strategy for 2022–2024, Together We Progress 24 (TWP24), which will drive our ambition to be a leader in service excellence,” he added.

The group’s net fund-based income increased by 3.8 per cent to RM1.47 billion year-on-year on the back of a 2.7 per cent increase in gross fund-based income, supported by gross loans and financing growth of 7.0 per cent.

However, non-fund based income fell 20.3 per cent to RM432.7 million, primarily due to lower fee income and net trading and investment income, offset by higher insurance underwriting surplus.

Operating expenses declined by 2.9 per cent to RM859.1 million from a year ago.

"With positive Jaws (the Jaws ratio is a measure used in finance to demonstrate the extent to which a trading entity's income growth rate exceeds its expenses growth rate, measured as a percentage), cost-to-income ratio improved to 45.1 per cent compared with 46.0 per cent a year ago,” it said.

The group said expected credit losses (ECL) reduced to RM153.8 million from lower ECL on loans.

"Correspondingly, the annualised credit charge ratio improved to 0.29 per cent compared with 0.39 per cent for the same period last year,” it said.

RHB Bank said balance sheet and capital position remained robust and the group’s total assets increased 2.8 per cent from December 2021 to RM297.6 billion as at March 31, 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 and total capital ratio stood at 16.8 per cent and 19.4 per cent, respectively.

"The group’s gross loans and financing grew 1.4 per cent year-to-date to RM201.3 billion, mainly supported by growth in mortgage, small and medium enterprise (SME) and Singapore. Domestic loans and financing grew 1.0 per cent year-to-date,” it said.

Gross impaired loans stood at RM3.0 billion as at March 31, 2022, with gross impaired loans ratio of 1.50 per cent compared with 1.49 per cent as of December 2021.

Loan loss coverage ratio for the group, excluding regulatory reserves, strengthened to 125.7 per cent as at end-March 2022, compared with 122.4 per cent in December 2021.

"Customer deposits increased 3.6 per cent year-to-date to RM226.5 billion, predominantly attributed to fixed and money market time deposits growth of 5.1 per cent.

"Current account saving accounts (CASA) composition stood at 29.0 per cent as at March 31, 2022. Liquidity coverage ratio remained healthy at 144.8 per cent,” it said.

Its wholly-owned subsidiary RHB Islamic Bank, meanwhile, recorded a pre-tax profit of RM255.1 million.

"Gross financing grew 2.2 per cent year-to-date to RM76.5 billion.

"Islamic business contributed 43.5 per cent of the group’s total domestic gross loans and financing, an improvement from 43.0 per cent in December 2021,” it said. — Bernama