RHB Capital Q4 earnings climb 23.7% to RM504.5mil

by **hlk** Mon 24 Feb 2014, 15:38

KUALA LUMPUR: RHB Capital Bhd saw its earnings for the fourth quarter ending Dec 31, 2013, grow 23.7% year-on-year to RM504.5mil from RM407.9mil, as revenue climbed 12.7% to RM2.51bil from RM2.23bil.

Profit before tax for the quarter was 22% higher at RM683mil from RM560.3mil previously.

Earnings per share improved to 19.9 sen from 17.1 sen in the corresponding quarter a year earlier, and RHB Capital proposed a final single-tier dividend of 10.3 sen per share, amounting to RM262.3mil.

The total dividend for 2013 came to 16.3 sen.

Earnings for the full year were RM1.831bil – up 2.6% from RM1.784bil the year before, with revenue up by 19.8% to RM9.577bil from RM8.022bil. Profit before tax improved 3.6% to RM2.47bil from RM2.384bil.

According to RHB Capital, despite the soaring revenue, operating expenses in 2013 increased by 33.1% year-on-year largely due to the full period impact of the enlarged investment bank cost base, increase in sales-related personnel cost, higher commission and incentive compensation linked to stronger business volume and merger integration cost.

Allowance for impairment on loans and financing for the year increased to RM448mil from RM148.5mil recorded in 2012.

“This was primarily due to lower bad debts recovered, one-time bad debts written off pertaining to the refinement in application of MFRS139 (Financial Instruments: Recognition and Measurement) and higher collective allowance set aside in tandem with loans and financing growth,” it said.

The group also completed the full integration of RHB-OSK Investment Bank with Single Platform Day One on Nov 25, 2013 with total integration costs amounting to RM30.2mil.

Cost to income ratio of the group stood at 51.3% for 2013.

On its prospect for the year, RHB Capital said the banking sector was expected to remain strong in 2014, on the back of a stronger recovery in the external sector, coupled with a resilient domestic economy. It expects performance for the financial year 2014 to continue its growth momentum.