RHB Bank Bhd reported a 6.7 per cent increase in net profit to RM630.2 million for the quarter ended May 31 2019 (1Q19). NST file pix.

KUALA LUMPUR: RHB Bank Bhd reported a 6.7 per cent increase in net profit to RM630.2 million for the quarter ended March 31 2019 (1Q19).

RHB said this was achieved on the back of lower expected credit losses on loans and other financial assets and lower operating expenses.

Group revenue rose 7.1 per cent to RM3.35 billion, with earnings per share for the quarter standing at 15.72 sen against 14.73 sen previously.

Group managing director Datuk Khairussaleh Ramli is cautiously optimistic that RHB would be able to continue delivering despite the moderating economic climate.

“The group started 2019 with a good set of results as demonstrated by the 6.7 per cent growth in net profit. However, we remain cautious for the rest of the year given the continued challenging operating environment against the backdrop of slowing global economy and ongoing trade tensions.

“We will maintain our focus to uphold our strong fundamentals and prudence in managing the business,” he said in a statement today.

The Malaysian gross domestic product (GDP) growth is expected to moderate to 4.6 per cent in 2019 against 4.7 per cent registered last year.

Khairussaleh said further adverse developments on the global trade tensions might pose a downside risk to the growth forecast.

Banking sector loans were expected to grow by mid-single digit supported by the consumer and business segments,: he added.

“We will continue to invest in digital capabilities and transform the group’s operating model through the AGILE way of working, aimed at fostering innovation, improve customer experience and achieve operational efficiency and productivity,” he said.

During the quarter, RHB’s cost-to-income ratio improved slightly to 48.6 per cent from 48.8 per cent a year ago.

Its total assets increased by 2.5 per cent within the period from December 2018 to RM249.3 billion as at March 31 this year.

RHB’s non-fund based income was stable at RM534 million, contributed largely by higher capital market fee income and insurance underwriting surplus, while operating expenses declined by 1.9 per cent to RM846.3 million driven by lower personnel costs and IT-related expenses.