KUALA LUMPUR (Aug 27): RHB Bank Bhd (KL:RHBBANK), Malaysia’s fourth largest bank by assets, said on Tuesday that its net profit fell by 11% in the second quarter from a year earlier, dragged by provisions.

Net profit for the three months ended June 30, 2024 (2QFY2024) was RM722.31 million, compared with RM808.70 million over the same period last year, RHB Bank said in an exchange filing. Net interest income rose 11% year-on-year to RM989.36 million, while non-interest income nearly doubled to RM603.16 million.

“Moving forward, the group will focus on improving our asset quality, especially in our regional operations, through containment of delinquencies and intensifying our recovery efforts,” RHB Bank said.

The company booked RM144.96 million in allowances for credit losses on financial assets during the quarter.

RHB Bank also declared a cash dividend of 15 sen per share, to be paid at a date to be determined later.

Its net interest margin — a measure of profitability from interest charged on loans after paying returns on deposits — expanded quarter-on-quarter and year-on-year to 1.99% in 2QFY2024, thanks to a liability management initiative.

“We are set to embark on our new corporate strategy, which will be launched in 1QFY2025,” said group managing director Mohd Rashid Mohamad. “We remain steadfast in our strategic priorities, and are well positioned to navigate the evolving market landscape.”

For the first half ended June 30, 2024 (1HFY2024), net profit was down 7.5% year-on-year to RM1.45 billion from RM1.57 billion a year earlier. Net interest income for the period was up 7.9% at RM1.92 billion, while non-interest income surged 41% to RM1.11 billion.

Deposits from customers increased 4.8% as current-account-savings-account grew 7.0%. Gross loans and financing expanded 6.4% in 1HFY2024.

In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — ended June at 1.76%, while loan loss coverage was at 70.4%. When regulatory reserves were included, the ratio rose to 106.8%.

RHB Bank’s common equity Tier 1 capital — a measure of a bank’s capital strength based on the highest quality of regulatory capital — remained unchanged at 16.5%.

RHB's shares shed 1 sen or 0.2% to close at RM5.92, valuing the group at RM25.8 billion.