RHB Capital’s FY 2011 results fail to reach expectations

RHB Capital Bhd’s full-year and fourth quarter results for financial year 2011 didn't reach consensus estimates.

Nonetheless, the investment bank is said to be on its way to achieving its performance targets set for this financial year.

The bank’s 4Q11 and FY11 net profit came in at RM348 million and RM1.5 billion respectively with the latter being about eight per cent below that of consensus estimates.

According to HwangDBS Research, the key drag to earnings were RM76 million mark-to-market losses from hedging positions, RM40 million impairment charge for collateralised loan obligations and RM20 million one-off human resources expenses

Net interest margin fell four basis points quarter-on-quarter and 15bps year-on-year due to pressure on asset yields and funding costs.

Deposits surged six per cent q-o-q led by fixed deposits and current account savings account, up four percent,  which pressured funding costs. Fixed deposit market share rose to 11 per cent from eight percent a year ago. Gross non-performing loans ratio improved to 3.4 per cent from 3.7 per cent in 3Q11.

RHB Cap’s FY11 loan book of RM97.3 billion continued to grow strongly by 16 percent, in line with the management’s target of more than 15 per cent, on a y-o-y basis, with a lower net interest margin at 2.57 per cent

The bank indicated its targets of over 12 per cent loan and deposit growth for FY12, and over 14 per cent ROE ex-acquisition.

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