Photo: An RHB Islamic branch in Johor, Malaysia, on July 20,2019. Fn.artworks/

Islamic Finance

Malaysia’s RHB Islamic’s third-quarter profit rise year-on-year soured by dip from June earnings

Malaysia’s RHB Islamic posted 35.94% increase in profit before tax for July-September versus the same period in 2018 but this was 5.6% lower than its second-quarter result.

“The lower profit was mainly attributed to higher allowance for credit losses by RM36.7 million, partially offset by higher net funding income by RM22.6 million, higher non-funding income by RM1.9 million and lower overhead expenses by RM0.8 million,” said the bank in a filing with Bursa Malaysia on Monday (Nov 25).

RHB Islamic reported 192.57 million ringgit ($46.13 million) in profit before tax for July-September compared to 141.66 million ringgit for the same period last year.

Its overall Group saw its own PBT rise by a much lower 7.05% to reach 833.97 million ringgit in PBT for the third-quarter, up from 779.04 million ringgit for the same three months in 2018. 

The Islamic subsidiary saw its income from investment of depositors' funds surge by 22.46% to 726.77 million ringgit for the third-quarter versus the same period in 2018.

Its income from investment account funds also rose, by 6.7% to 108.46 million ringgit.

RHB Group’s Shariah-compliant subsidiary’s assets grew by 11.8% to 73.36 billion ringgit from December 31, accounting for around 29.1% of the Group's 252.15 billion ringgit in assets. 

Overall, the Group's assets grew by a much lower 3.69%.

Gross financing for RHB Islamic expanded to 57.6 billion ringgit, an increase of 19.3% year-on-year, said the bank in a statement. This accounts for 37% of the Group's total domestic loans and financing.

On the liabilities side, customer deposits reached 51.46 billion ringgit from 45.73 billion ringgit, an increase of 12.53%.Around 60%, or 34.9 billion ringgit, of its financing assets were based on murabahah, followed by around 22% on musharakah, according to Salaam Gateway calculation.

“Our strategic focus under the current five-year roadmap, FIT22, is growth through key segments of affluent, SME, mid-cap and large cap, and innovation through digital technology and adopting the AGILE way of working across the organisation aimed at better productivity and efficiency as well as delivering a holistic customer journey and ecosystem,” said the bank.

($1 = 4.1740 Malaysian ringgit)

© 2019 All Rights Reserved