KUALA LUMPUR: RHB Bank Bhd's net profit slipped 10.7 per cent year-on-year (YoY) to RM722.31 million in the second quarter ended June 30, 2024 (Q2 2024) due to higher operating expenses (opex) and higher allowances for credit losses.
It reported RM808.7 million net profit in Q2 2023.
Revenue for the period, however, rose 9.2 per cent YoY to RM4.42 billion from RM4.05 billion in the same period last year.
The group however declared an interim dividend of 15 sen per share, representing a 45 per cent payout ratio.
For the first half ended June 30, 2024 (1H24), its net profit dropped 7.5 per cent to RM1.45 billion compared to RM1.57 billion a year ago.
The lender said the decline was mainly due to higher allowances for credit losses, higher operating expenses and higher share of loss in associates, partially offset by higher non-fund based income and net funding income as well as lower tax expense.
Revenue rose 10.7 per cent to RM8.82 billion in the period under review from RM7.97 billion a year ago.
Net fund-based income increased 4.0 per cent YoY to RM2.8 billion, driven by higher funding income from a 6.4 per cent YoY growth in gross loans and financing.
Net interest margin (NIM) improved by 6 basis points quarter-on-quarter to 1.89 per cent.
Non-fund-based income increased 28.5 per cent YoY to RM1.4 billion, primarily due to higher fee income, net gains on forex and derivatives, net trading and investment income, and a one-off gain from the disposal of RHB Securities Vietnam Company Limited (RHBSVN).
Operating expenses amounted to RM1.9 billion, mainly due to personnel, establishment, and marketing costs.
The bank's cost-to-income ratio improved to 46.3 per cent compared with 47.5 per cent a year ago.
Total extra credit losses provided was RM360 million for 1H24.
Meanwhile, gross impaired loans (GIL) stood at RM4 billion, with a GIL ratio of 1.76 per cent, up from 1.74 per cent (RM3.9 billion) in December 2023. Loan loss coverage ratio for the group, including regulatory reserves, improved to 106.8 per cent, and 70.4 per cent without regulatory reserves.
Customer deposits stood at RM240.3 billion, with a current account savings account (CASA) composition of 28.1 per cent, and liquidity coverage ratio ("LCR") remained sound at 139.6 per cent.
Total assets for the group increased 1.0 per cent year-to-date to RM331.9 billion.
Net assets per share were RM7.27, with shareholders' equity at RM31.7 billion as of June 30, 2024.
RHB Banking Group managing director and chief executive officer Mohd Rashid Mohamad said the bank has taken several measures to ensure it possesses the necessary core and technical competencies, as well as leadership bench strength, to navigate the challenges ahead and drive sustainable growth.
"Notably, we have recently appointed key strategic leaders, including the appointment of group chief financial officer, group chief internal auditor as well as chief executive officer of RHB Investment Bank."
"We have also created two new roles - regional chief financial officer and head of capital strategy, as well as head of sustainable finance."We are making significant progress in growing our sustainable financial services, having achieved over RM31 billion of the RM50 billion target outlined in our five-year sustainability strategy & roadmap," he said.
Mohd Rashid added that the group is set to embark on its new corporate strategy, which will be launched in Q1 2025.
"We remain steadfast in our strategic priorities and are well-positioned to navigate the evolving market landscape," said Mohd Rashid.