KUALA LUMPUR (May 29): RHB Bank Bhd (KL:RHBBANK), Malaysia’s fourth-largest banking group by assets, said on Wednesday its net profit slipped 4.1% in the first quarter from a year earlier on higher provisions and operating expenses.

Net profit for the three months ended March 31, 2024 (1QFY2024) was RM730.17 million, compared with RM761.67 million for the same period a year ago, RHB said in an exchange filing. Net interest income rose 9.7% year-on-year to RM1.58 billion, while non-interest income rose 7.2% to RM504.10 million.

“Our balance sheet remains strong due to our robust capital and liquidity positions, and rigorous risk management,” said group managing director Mohd Rashid Mohamad. “We will continue to improve our business performance and asset quality, capture opportunities, and grow market share in the targeted segments.”

The net interest margin — a measure of profitability from interests charged on loans after deducting returns paid to depositors — came in at 1.83% for the quarter.

Allowances for credit losses on financial assets rose to RM214.99 million for the quarter, from RM46.04 million in 1QFY2023. Operating expenses rose 12% to RM959.2 million in 1QFY2024, mainly due to higher personnel, establishment and marketing costs.

“The group will continue to focus on growing its business, exercising cost discipline, and maintaining its prudent stance,” the bank said.

Current-account-savings-account growth stood at 2.9%, while gross loans and financing grew 1.1%.

In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — ended March at 1.83%, while loan loss coverage was at 70.1%. When regulatory reserves were included, the ratio rose to 106.3%.

RHB’s common equity tier 1 capital — a measure of a bank’s capital strength based on the highest quality of regulatory capital — stood at 16.5%.

The company did not declare any dividend for the quarter.