Kenanga Sustains Profit Momentum, Bolstered by Digital Strategy

KUALA LUMPUR, MALAYSIA – Media
OutReach – 31 May 2021 – Malaysia’s leading independent investment bank, Kenanga
Investment Bank Berhad (“Kenanga” or the “Group”) today 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. 

Datuk Chay Wai Leong, Group Managing Director of Kenanga Investment Bank Berhad

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.”

“With
the roll-out of the national vaccination programme gaining momentum, we are
cautiously optimistic about the health of the overall economy for the second
half of the year. Bolstered by our digital initiatives that are in the
pipeline, we are on track to boost our ecosystem, sustain growth and deliver against
targets for 2021,” Datuk Chay added.

Last
month the Group’s fully owned subsidiary, Kenanga Investors Berhad, launched Kenanga
Waqf Al-Ihsan Fund, further expanding on its Shariah-compliant investments.
Waqf is an Islamic philanthropic-based vehicle that focuses on areas such as education,
healthcare, economic empowerment, and environmental preservation. The fund will
serve as the launchpad for other similar ESG-linked products as part of Kenanga
Investors’ move towards sustainable and socially responsible investing.

For more information on Kenanga,
please visit www.kenanga.com.my