Higher net funding income and lower impairment losses on loans boosted yearly earnings.
RHB Bank Berhad’s profits rose 16% YoY to $496.88m (RM1.95b) in 2017 thanks to higher net funding income and lower impairment losses on loans and other assets.
According to a press release, net fund income rose 5.4% YoY largely due to steady loan growth and prudent cost management which also brought about stable NIM performance at 2.18% for the full year.
Allowances for impairment on loans and financing crashed 28.3% YoY to $108.75m (RM426.8m), primarily due to pre-emptive provisions for legacy steel-related exposure provided in the previous year which slightly improved the credit change for the full year.
Gross loans and financing grew 3.7% YoY to $40.8b (RM160.1b). Domestic loans and financing grew 5.2% Y-o-Y mainly from mortgages and SMEs which grew 13.2% and 8.7% respectively, negated by a decline in corporate loans which is in line with the Group’s strategy to rebalance its loan composition.
Retail loans and financing rose 8.7% YoY to $19.44b (RM 76.3b) thanks to a steady demand for mortgages and personal loans.
The bank’s Islamic banking business also extended its double digit growth momentum after expanding 26.1% to $10.96b (RM43b) and contributing almost a third (29.7%) of the company’s total domestic gross loans and financing.
“The results we have achieved attest to our resilience and ability to sustain growth momentum despite the challenging operating environment. The Group delivered a higher net profit Y-o-Y, underpinned by a strong domestic loans growth and prudent funding cost management, as we saw improvement in asset quality and operating cost management,” said RHB Banking Group Managing Director Dato’ Khairussaleh Ramli.
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