RHB Capital Q1 earnings rise 16% to RM552m

PETALING JAYA: RHB Capital Bhd's earnings rose 15.9% to RM552.01 million in the first quarter ended March 31, 2016 on net interest income growth and cost savings strategy.
Revenue increased marginally to RM2.73 billion from RM2.69 billion.
"We are pleased with the financial results of the group for the first quarter of 2016. However, we remain vigilant on the continued volatility in the global markets and the challenges ahead," RHB Banking Group managing director Datuk Khairussaleh Ramli said.
He said the group will continue to improve efficiency and productivity as it rebases its business fundamentals and identify opportunities for growth.
In the first quarter, RHB Capital said, total income increased by 6.3% to RM1.6 billion, supported by solid net interest and fund based income growth of 12.1% to RM1.09 billion. "This was mainly attributable to improved net interest margin and an expanded loan base," it said.
Meanwhile, its net interest margin improved by 7 basis points to 2.22% in the first quarter 2016.
As a result of its cost optimisation efforts, RHB Capital's operating expenses were lower by 5.2% from a year ago and cost-to-income ratio improved significantly to 48.5% compared with 54.3% in the previous corresponding period.
Allowances for impairment on loans and financing for the year increased to RM80.2 million from RM50.2 million, primarily due to higher collective allowances.
Total assets, however, decreased by 2.3% to RM225.5 billion, due mainly to a reduction in financial assets and investments by RM3.8 billion and net loans portfolio by RM1.7 billion.
The group's gross loans and financing grew by 4.2% year-on-year to RM149.6 billion, but decreased by 1.2% from December 2015 mainly due to one large corporate repayment amounting to RM1.0 billion.
Business banking loans and financing recorded the strongest growth at 14.5% on an annualised basis, while its domestic loan market share stood at 9.3% at the end of the first quarter.
Asset quality continued to improve with the gross impaired loans ratio declining to 1.82% from 1.88% in December 2015. Loan loss coverage for the group rose to 85.8% as at March 2016 from 83.3% in December 2015.