RHB Bank pre-tax profit falls to RM2.23 bln

Revenue edged down to RM10.57 billion from RM10.77 billion before, it said in a statement today.

RHB Bank said retail banking was the biggest contributor to the group and it reported a pre-tax profit of RM1.5 billion for the financial year ended Dec 31, 2016, 4.4 per cent lower from the previous year.

"Excluding a one-off collective allowance written back on mortgage portfolio in 2015, pre-tax profit rose by 8.5 per cent, underpinned by lower operating expenses and lower allowances for loans and financing," it said.

For the fourth quarter ended Dec 31, 2016, RHB Bank's pre-tax profit fell to RM344.41 million from RM518.07 million in the same quarter in 2015.

Revenue stood at RM2.55 billion versus RM2.81 billion previously.

During the year, the bank said, allowances for impairment on loans and financing increased to RM595.2 million from RM343.5 million a year ago, primarily due to, among others, higher individual allowances for loan impairment on certain corporate accounts relating to oil and gas.

There were also pre-emptive provisions for legacy steel related exposure, coupled with the absence of a one-off collective allowance written back due to model refinement on mortgage portfolio in 2015, it said.

RHB Bank said gross impaired loans ratio was higher at 2.43 per cent from 1.88 per cent as at Dec 31, 2015 and total impairment losses on other assets were higher at RM268.2 million mainly due to the full impairment made for a corporate bond in Singapore.

"The group's gross loans and financing grew by two per cent year-on-year to RM154.5 billion, which came mainly from mortgages and small and medium enterprises (SMEs), were negated by a decline in corporate loans which was in line with our strategy to rebalance the group's loan composition," it said.

It said mortgages and SME loans and financing growth were resilient with a growth rate of 13.3 per cent and 11.3 per cent respectively, more than offset the 4.6 per cent contraction in corporate loan portfolios.

Domestic loan market share stood at nine per cent as at end-2016, it said.

RHB Bank said for international business, Singapore's performance was affected by oil and gas exposure, resulting in a pre-tax loss of RM269.1 million for the FY16.

Singapore loans and advances increased by 1.4 per cent to S$4.2 billion (RM13.22 billion), while customer deposits increased by 22.1 per cent to S$6 billion (RM18.89 billion), largely contributed by current and saving account growth.

"International business, excluding Singapore, registered a pre-tax profit of RM36.1 million, 2.8 per cent higher over a year ago.

"This was mainly due to improved profitability in Cambodia which recorded an increase in pre-tax profit by 11.1 per cent to US$7.6 million (RM33.79 million), while Laos recorded a pre-tax profit of US$1 million (RM4.44 million) in its second year of operation," it said.