KUALA LUMPUR, Feb 26 — RHB Bank Bhd’s net profit for the financial year ended December 31, 2020 (FY20) declined 18.1 per cent to RM2.03 billion from RM2.48 billion in FY19.
Revenue fell to RM12.59 billion from RM13.53 billion previously.
In a filing with Bursa Malaysia today, it said the lower net profit was due to net modification loss arising from loan moratorium and higher expected credit losses (ECL).
“Higher net fund based and non-fund based income helped mitigate the profit decrease,” it said.
The bank said net fund based income increased by 6.3 per cent year-on-year to RM5.27 billion driven by proactive funding cost management, which dropped 23.8 per cent year-on-year, supported by 28.3 per cent growth in current account saving account (CASA) growth and redemption of certain capital instruments over the course of 2019 and 2020.
Non-fund based income rose by 11.2 per cent to RM2.33 billion, contributed largely by higher net trading and investment income, brokerage income, and insurance underwriting surplus.
It said operating expenses remained constant year-on-year at RM3.39 billion and the cost-to-income ratio improved to 47.1 per cent compared with 48 per cent a year ago.
“The bank remained prudent and continues to set aside pre-emptive provisions to cater for potential adverse impact to asset quality brought about by the Covid-19 pandemic.”
As a result, it said ECL increased significantly to RM1.14 billion from RM275.8 million in the previous year while the full-year credit charge ratio rose to 0.58 per cent compared with 0.18 per cent last year.
For the fourth quarter of FY20, the bank’s net profit fell to RM438.63 million from RM621.01 million in the same quarter last year while revenue slipped to RM3.08 billion from RM3.42 billion previously.
On the current financial year prospect, RHB Bank said the group expected 2021 to remain challenging given the recent resurgence of Covid-19 cases and the prolonged movement control order which could restrain the initial pick-up in economic activity.
Group managing director of RHB Banking Group, Datuk Khairussaleh Ramli, said the bank would continue to offer support to its customers, particularly the B40 segment, via the targeted payment assistance programme which would run until June 30, 2021.
“We believe that assisting the customers is key in fostering resilience, through which we will emerge from this pandemic even stronger than before,” he added. — Bernama
