RHB sustains growth
In addition, the lender is projecting for the banking sector to maintain its strong capital and liquidity positions.
RHB's group managing director and group chief executive Datuk Mohd Rashid Mohamad said the bank's new three-year strategic roadmap, named PROGRESS27, has set a clear course for the lender toward becoming the best in service, enhancing profitability and reinforcing its purpose-driven commitment.
'With focused execution priorities, from simplifying customer journeys to advancing our sustainability ambitions, we are well-positioned to deliver near-term value while unlocking long-term value for all stakeholders,' added Mohd Rashid.
Releasing its results for the first quarter ended March 31 (1Q25) yesterday, RHB saw net profit inch up by 2.7% year-on-year (y-o-y) to RM750mil, despite a marginal dip in revenue to RM4.39bil.
The 1Q25 performance translates to an earnings per share of 17.2 sen.
The group attributed the growth in net profit primarily to higher net funding income and improved credit cost management, which was offset by lower non-fund based income, higher tax expense, higher operating expenses and higher share of loss in associates.
At the same time, it reported that total income stood at RM2bil, a marginal dip of 1.9% y-o-y mainly from contraction in non-fund based income due to lower net gain on foreign exchange (forex) and derivatives, as well as net trading and investment income.
RHB said it has maintained operational stability, supported by prudent cost management, continued strength in capital and liquidity positions, reflected by the containment of cost growth at 1.2%, while cost-to-income ratio stood at 47.4% from 45.9% a year ago, reflecting the marginal contraction in income.
Commenting on the results, Mohd Rashid remarked that the sustaining of the bank's earnings growth momentum in 1Q25 was underpinned by solid fundamentals and early traction from its PROGRESS27 strategy.
'Our cost optimisation efforts are beginning to deliver results, enabling us to contain expenses while driving growth in key segments.
'At the same time, our continued focus on asset quality has led to a reduction in credit cost. We remained disciplined in execution, strengthening our core capabilities, driving operational excellence, and unlocking new growth opportunities.'
Net fund based income increased by 7.3% to RM1.49bil y-o-y on the back of gross loans and financing growth of 6.3%, while non-fund based income declined by 20.2% to RM561mil from a year ago, driven by lower net trading and investment income, lower net gain on forex and derivatives as well as lower income from its insurance business, partly offset by higher fee income.
Net allowance for credit losses was lower at RM105.8mil, primarily due to lower credit losses on loans and financing.
Meanwhile, total assets of the group increased by 0.7% from December 2024 to RM352.5bil as at March 31, 2025, with net assets per share at RM7.39, and shareholders' equity at RM32.2bil.
Concurrently, the group's gross loans and financing grew by 6.3% y-o-y to RM239.2bil, mainly supported by growth in mortgage, corporate, commercial and automotive finance.
RHB's gross impaired loans (GIL) increased marginally to RM3.6bil, with a GIL ratio of 1.50%, from 1.47%, or RM3.5bil in December 2024.
The group reported a domestic GIL ratio of 1.22%, which is lower than the banking industry's GIL ratio of 1.42%. Loan loss coverage ratio for the group, including regulatory reserves, improved to 115.7%, while it stands at 76.9% if regulatory reserves are excluded.
Customer deposits increased by 2.3% to RM248.5bil, primarily due to growth in money market time deposits by 31.3%, offset by a decrease in current accounts and saving accounts (Casa) by 1.1% and fixed deposits by 0.9%. Casa composition stood at 28.0% as at March 31, 2025, and liquidity coverage ratio remained sound at 134.6%.
Compared to the previous quarter ended December 2024, RHB saw net profit decrease by 10.1% from RM834.5mil, which it attributed mainly to lower non-fund based income and higher allowances for credit losses.
These were partly offset by lower operating expenses, higher net funding income, lower impairment on other non-financial assets and lower share of loss in associates during 1Q25.
RHB did not declare any dividends for the quarter.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Focus Malaysia
21 hours ago
- Focus Malaysia
Tariff uncertainty clouds rate cut gains as Malaysia eyes global trade risks
BANK Negara's latest overnight policy rate (OPR) cut was a pre-emptive one, not based on existing weakness in data points. But Kenanga thinks cues from past patterns on how sectors would trade subsequently can still serve as a good reference point. Historically, post a domestic rate cut, the 12-month return typically shows that the FBM KLCI's 12-month index returns post a rate cut were in the positive 3 out of 4 occasions since 2009. 'Among these, the financial sector has historically fared better with the exception of the May 2019 OPR cut, if we exclude the technology sector which is exposed to global supply chain factors,' said Kenanga. This is expressed in relative terms to the FBM KLCI performance. On a 12-month basis, historically, the utilities sector performed less well after the onset of a rate cut. Kenanga Economists sees that there will be no more rate cut for the rest of the year, unless GDP growth drops below 3.5% or if external conditions worsen, then BNM may have room to ease further. Nevertheless, we have flagged a mild bull-steepening bias. This terminology describes a scenario where short-term bond yields fall faster than longer-term bond yields as investors typically favour shorter-term investments, which may be brought about by expectation of additional rate cuts. Utilities tend to outperform in such a phase, and quarter three calendar year 2025 (3QCY25) would likely offer such tactical playbook. This is amid the complexity of US tariff discussions ahead of the 1 August effective implementation date, where Malaysia via its Investment, Trade, and Industry Minister has said that Malaysia is taking a measured approach to tariff negotiations, being mindful of broader implications. On the other hand, Kenanga also saw very little evidence of a rate cut being correlating well with improved stock returns in the consumer sector. Specific for consumer, we watch for the fact that higher disposable income from the OPR cut may be offset by the inflation cost-pass-through from businesses to the consumer. We observe that the 25 bps rate cut is not expected to move the needle for the sectors under coverage in terms of interest savings, as these hover less than 2% to earnings. We foresee some savings accruing to Utilities and Telco names, but expect to see opposite effect ringing true for the Oil and Gas sector as the players are generally in net cash position; some of them have employed hedging strategies, true for the likes of MISC and YINSON. Banking sector already reflecting pandemic level of loan growth expectation in ROEs and is fundamentally at a bargain level. The key for us is a strong GIL ratios for banks of <1.5%, which when coupled with the effect of a rate cut, could alleviate the need to top up on provisions. We believe investors will look to find more comfort in the area of growth. In this regard, banking analyst Clement Chua in his 10 July Sector Update estimated that all else equal, share-prices implied ROEs would commensurate with a loan growth for the system of 3.4% – which was essentially levels seen during Covid-19 (2020). This thus gives us confidence that the banks are undervalued. In the very immediate term, should bull-steepening bias materialize, historically it would be an uphill task for banks to outperform during such a stretch. Risk to the REIT sector earnings growth would be from the implementation of service tax, although a rate cut without GDP growth cut would likely be positive for the sector. As analysed in our latest REIT sector report (dated 10 July), the implied yield at the current moment at c.3.5% (MGS). This compares to 3.44% at time of writing. Our Kenanga forecast is for the year-end MGS to hover around similar levels and thus while the sector has momentum, we believe that fundamentally, the upside is more limited. Where we may be wrong is if more OPR cuts are deemed necessary – our coverage companies display a yield of 5.3% currently, and in the past decade we have seen the REIT sector trade at a level commensurating with yield of 4.6% during the pandemic. —July 14, 2025 Main image: Propertyguru
The Star
a day ago
- The Star
Weak signals indicate continued consolidation
KUALA LUMPUR: Weak technical signals and trend indicators after last week's choppy trading sessions suggest the FBM KLCI will continue to consolidate with a downside bias this week, pending fresh catalysts, says TA Securities. The research firm said in its market commentary lingering concerns over trade uncertainty between the US and global trade partners are also expected to dampen sentiment over the near term, although Bank Negara's recent overnight policy rate cut could provide support to interest-sensitive sectors such as property and construction. At Monday's open, the FBM KLCI dropped 0.51 points to 1,511.83, as investors stayed by the sidelines. Declining shares included RHB down six sen to RM6.35, Axiata falling three sen to RM2.53 and PETRONAS Chemicals sliding three sen to RM3.27. The benchmark, meanwhile, was supported by PETRONAS Gas up 16 sen to RM17.86, Scientex gaining five sen to RM3.32 and QL Resources adding five sen to RM4.57. Most active stocks were Zetrix AI up one sen to RM1.01, Top Glove gaining two sen to 70.5 sen and XL unchanged at 55.5 sen. On sectoral outlook, Malacca Securities said the prospects of further monetary easing by Bank Negara should cushion the downside risk on the local front, especially in property stocks, given the lower mortgage rates. "We also view this as an opportune time to build positions in REITs, which still offer premium dividend yields to Malaysian bonds. "Meanwhile, we favour utility companies like MNHLDG and UUE as both companies may be a decent proxy for Tenaga's CapEx rollout on power grid upgrades, RE as well as NETR policies," it said in a note.
The Star
a day ago
- The Star
M-REITs stand out as rates fall
WITH global uncertainty stemming from US tariffs and slowing global demand, it is becoming more challenging for investors to find steady income plays. This week's 25-basis-points (bps) cut in the overnight policy rate (OPR) to 2.75% by Bank Negara means money in banks – whether in savings accounts or fixed deposits – will earn lower returns, making traditional bank-based saving options even less appealing. Cancel anytime. Ad-free. Full access to Web and App. RM 13.90/month RM 9.73 /month Billed as RM 9.73 for the 1st month, RM 13.90 thereafter. RM 12.39/month RM 8.63 /month Billed as RM 103.60 for the 1st year, RM 148 thereafter.
