Kenanga Sustains Profit Momentum, Bolstered by Digital Strategy
Kenanga Investment Bank Berhad announced its first quarter financial results for the period ended 31 March 2021 (“1Q21”). The Group recorded profit after tax and non-controlling interest (“PATNCI” or “net profit”) of RM34.2 million for the quarter, an increase of RM41.1 million relative to RM6.9 million net loss from 1Q20. The previous net loss was mainly due to provision of credit loss expenses which has progressively been reversed over the quarters.
Consolidated revenue for the quarter under review increased by 51.3% year-on-year (“YoY”) to RM250.1 million in 1Q21. Annualised Return on Equity (ROE) is at 13.8%, compared to full year 2020 of 10.7%. The strong performance was mainly attributed to higher contributions from the stock broking segment and the investment & wealth management segment, as well as, higher share of profits from the joint venture with Rakuten Trade.
Kenanga’s stock broking division continued to benefit from the high trading activities on Bursa Malaysia. In 1Q21, the local bourse saw its average daily trading value (“ADV”) reach RM10.0 billion, which was higher than the ADV of RM8.6 billion recorded in the whole of 2020. As a result, 1Q21 profit before tax (“PBT”) from the segment jumped to RM34.3 million, as compared to a loss before tax (“LBT”) of RM13.6 million in the same period last year.
PBT from the investment & wealth management division surged almost fifteen-fold to RM7.6 million in 1Q21 from RM0.5 million in 1Q20. The significant increase was attributed to the higher management fees income generated. In 1Q21, the monthly average of new accounts opened was 10,457 for the Group’s joint-venture, Rakuten Trade, higher against the monthly average of 9,893 new accounts registered in the bumper year of 2020.
Group Managing Director of Kenanga Investment Bank Berhad, Datuk Chay Wai Leong commented, “Our digital strategy has proven invaluable in these trying times. Technology investments made in earlier years such as the remisier portal have allowed us to implement remote working before it became the norm. Today, we continue to handle high volume of account registrations and manage the servicing of our clients seamlessly in the face of the various Movement Restriction Orders implemented nationwide.”
(This content is surmised from a press release)