KUALA LUMPUR: RHB Bank Bhd's net profit eased 14.4 per cent to RM1.59 billion in the nine-month ended September 30, 2020 from RM1.86 billion in the corresponding period last year.
In a statement today, RHB said this was mainly due to net modification loss of RM392.4 million arising from the moratorium given to its customers and higher allowances for credit losses.
Its revenue during the same period dropped 5.9 per cent to RM9.51 billion from RM10.10 billion.
The group said its net fund based income increased 1.7 per cent year-on-year (Y-o-Y) to RM3.74 billion, driven by proactive management of funding costs, which dropped 19.3 per cent Y-o-Y, supported by an increase in current account savings account (CASA) composition from 25.4 per cent to 31.3 per cent and redemption of certain Hybrid Tier-1 Capital and sub-debt instruments over the course of 2019 and 2020.
RHB said its net interest margin (NIM) for the quarter dropped to 1.99 per cent compared with 2.13 per cent for the same period last year mainly from the impact of Overnight Policy Rate (OPR) cuts.
During the period, RHB said its non-fund based income improved by 14.3 per cent to RM1.77 billion, contributed largely by higher net trading and investment income, brokerage income and insurance underwriting surplus.
"The group remained prudent and continued to build up provisions to absorb any potential negative effects to asset quality as the extent of the pandemic impact is still uncertain especially with the resurgence in cases recently.
"As a result, allowances for credit losses on loans, advances and financing increased to RM525.9 million, up from RM238.8 million for the corresponding period last year.
"Annualised credit charge ratio was at 0.38 per cent compared with 0.18 per cent over the same period last year," the group said.
For the third quarter (Q3), RHB's net profit increased marginally one per cent to RM622.25 million from RM615.83 million.
Its revenue in Q3 decreased 9.8 per cent to RM3.01 billion from RM3.34 billion.
RHB Banking Group group managing director Datuk Khairussaleh Ramli said it remained vigilant and continued to navigate carefully through the impacts of the pandemic and bolster its provisions to tide through uncertainties ahead.
"While our liquidity and capital positions remain solid, it is important that we continue to strengthen these areas.
"We remain committed in providing targeted repayment assistance to our customers in weathering the effects of economic challenges brought about by the Covid-19 pandemic.
"As we navigate through the financial, operational and humanitarian impact of Covid-19 pandemic, we remain steadfast in our commitment to emerge from this crisis stronger - accelerating digital transformation and IT infrastructure modernisation, developing and upskilling our workforce, and implementing Agile@Scale," he said.