27/02/2024 05:50 PM

KUALA LUMPUR, Feb 27 (Bernama) -- RHB Bank Bhd’s net profit for the financial year ended Dec 31, 2023 (FY2023) rose 4.8 per cent to RM2.81 billion from RM2.68 billion in the preceding year due to higher non-fund based income and lower allowance for credit losses.

This was achieved on the back of 26.3 per cent higher revenue of RM16.58 billion.

Managing director and chief executive officer Mohd Rashid Mohamad said non-fund based income was up by 30.3 per cent to RM2.3 billion, but the better performance was partially offset by lower net fund-based income.

Total income was RM7.77 billion, of which net fund based income stood at RM5.45 billion on the back of higher funding costs, mainly due to fixed deposit growth of 14.3 per cent year-on-year (y-o-y), he said during a results briefing today.

Meanwhile, expected credit losses declined 28.4 per cent y-o-y to RM301.53 million.

He also noted that gross loans increased 4.8 per cent, attributed mainly to growth in Singapore and group community banking, while domestic loan growth stood at 3.4 per cent.

Total assets grew by 5.8 per cent to RM328.69 billion as at Dec 31, 2023.

RHB Bank’s net interest margin (NIM) for the year was 1.82 per cent.

Mohd Rashid said the group has also been proactively managing funding costs through active liability management, and taking this initiative into account, the effective NIM was 1.93 per cent.

“We are cognisant of the external headwinds and the impact on the pace of economic recovery in the markets we operate. Our fundamentals remain strong, as reflected by our strong capital and liquidity positions. 

“We are now in the final year of our ‘Together We Progress 2024’ (TWP24) corporate strategy. While we delivered a resilient financial performance for FY2023, we will continue to refine our focus and approach, and double down on innovation and cost management to improve business performance,” he said.

He also shared that customer deposits increased 7.9 per cent y-o-y to RM245.1 billion mainly from growth in retail, small and medium enterprises and Singapore segments with current account savings account (CASA) making up 27.9 per cent of total deposits. 

Moving forward, Mohd Rashid said the bank is expected to sustain its resilient performance this year (FY2024) and is targeting a 4.5 per cent loan growth in line with a better gross domestic product (GDP) growth which the bank is projecting at 4.6 per cent for this year.

“For the banking industry, demand for credit is expected to improve this year, led by stronger credit demand from the business segment.

“Overall, the sector is anticipated to remain resilient, bolstered by robust capital and liquidity positions and a conducive monetary policy,” he noted.

He said for FY2024, Singapore will continue to contribute to RHB’s growth and the operation in Malaysia, with expected improvements in GDP growth, will also perform better, particularly in the small and medium enterprise segment.

Mohd Rashid also highlighted the 40 per cent-owned Boost-RHB Digital Bank consortium which has also achieved a major milestone with the recent approval received from Bank Negara Malaysia and the Ministry of Finance in January this year for it to commence operations as a digital bank. 

The digital bank, formally known as Boost Bank by Axiata and RHB (Boost Bank), is the first primarily Malaysian-owned digital bank to begin operations in Malaysia. 

He noted that the bank is currently in the alpha testing phase with initial products being a savings account and Jars. A lending product will come online subsequently.

“The digital bank’s target segment is different from that of the group, and more of serving the underserved and unserved market. We see this digital bank more of a complement to our current services.

“We do not expect the digital bank to contribute significantly to the group in the first five years of its operation but we will continue to monitor the performance,” he said.

The group has declared a second interim dividend of 25 sen per share, consisting of a cash payout of 15 sen per share and an electable portion under the dividend reinvestment plan of 10 sen per share. 

“Together with its first interim dividend of 15 sen per share, the total dividend for FY2023 amounts to 40 sen per share or a 61.1 per cent payout ratio, translating into a dividend yield of 7.3 per cent,” he said.


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