RHB Bank Bhd expects its small and medium enterprises (SME) segment to outperform its last year’s growth as the banking institution seeks to rebalance its portfolio more towards the retail and SME segments and reduce its corporate segment exposure in the long run.
RHB group managing director Datuk Khairussaleh Ramli said SMEs are the backbone of the Malaysian economy and will continue to buttress economic growth moving forward.
“On that note, we believe that our growth in the SME segment will be stronger than last year. The first quarter figures have indicated a commendable performance of our SME segment and we anticipate it to continue,” Khairussaleh told reporters after RHB’s 51st annual general meeting.
RHB’s SME segment recorded growth of 16% in the financial year 2016 (FY16).
In an attempt to rebalance its portfolio in the long run, RHB aimed to increase its exposure in its retail, SME and corporate segments to 55%, 20% and 25%, respectively. At present, the banking institution’s exposure in retail stood at 50% while the SME and corporate segments comprised 19% and 31% respectively.
Khairussaleh also expressed optimism that RHB would be able to record a better performance in FY17.
“With the capital market and the stock market now on recovery, we expect a better operating year for RHB compared with a year earlier.
“Last year was probably the worst for us due to the provisions we incurred. Moving forward, we believe the worst is over and RHB is projected to perform better this year,” he said.
In FY16, the banking institution’s net profit rose marginally by 1% year-on-year to RM1.68bil, despite growth of 21.6% in operating profit before allowances. The strong growth of operating profit before allowances was offset by loan impairment and impairment loss on other assets.
RHB Bank’s allowances for impairment on loan and financing increased significantly by 73.3% to RM595.2mil, mainly due to higher individual allowances for loan impairment on certain corporate accounts relating to oil and gas. There were also pre-emptive provisions for steel related exposure coupled with write-backs on mortgage portfolios in 2015.
Commenting on the rumoured merger talks between RHB and AMMB Holdings Bhd, Khairussaleh denied such discussions are ongoing.
“Currently, we are not looking at potential mergers with any bank.
“That said, however, if an opportunity presents itself with adequate merits, we are open for consideration,” he said.
（Source : The Star）