Kenanga Investment Bank’s 1H21 net profit increases 4-fold to RM64.7 million

KUALA LUMPUR,
MALAYSIA – Media OutReach – 26 August 2021 – Malaysia’s leading independent investment bank, Kenanga Investment Bank Berhad (“Kenanga” or the “Group”)
today announced a 49.4% rise in profit after tax and non-controlling interest
(“PATNCI” or “net profit”) for the second quarter ended 30 June 2021 (“2Q21”)
to RM30.6 million, as compared to RM20.5 million in the same period last year
(“2Q20”). For the six months period ended 30 June 2021 (“1H21”), net profit increased
four-fold to RM64.7 million, from RM13.5 million in 1H20.

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

Consolidated
revenue for 2Q21 stood at RM212.6 million, marginally higher from RM210.6
million in 2Q20. Annualised Return on Equity (ROE) is at 12.8%, compared to
full year 2020 of 10.7%.

The
stronger earnings were largely attributed to higher contributions from the stockbroking
and investment and wealth management businesses, as well as higher share of
profits from the joint venture with Rakuten Trade.

More
than half of the Group’s profit before tax (“PBT”) was contributed by the
stockbroking segment, which continued to remain as the Group’s major earnings
contributor. PBT from this segment rose 45.3% to RM20.0 million in 2Q21, as
compared to RM13.7 million in the same period last year. The improvement was
mainly due to higher net interest income as well as trading and investment
income.

Likewise,
PBT contribution from the investment & wealth management division more than
doubled to RM6.2 million due to higher management fee income generated on the
back of increased asset under management and sales agency force.

Rakuten
Trade, the Group’s joint venture (“JV”) and Malaysia’s first full-fledged
online equity broker, continued to record solid average monthly account opening
at 6,800 accounts for 2Q21. At the end of June 2021, Rakuten had a total of 217,400
accounts, 51,600 more than it had a year ago. That, coupled with the
scalability of the business have also contributed to the increase in the
Group’s bottom-line.

Group
Managing Director of Kenanga Investment Bank Berhad, Datuk Chay Wai Leong commented, “We are
pleased that the Group continued to report a set of commendable results in the
second quarter. Economies of scale, particularly in our stockbroking division and
Rakuten Trade, have helped improve the Group’s profitability. With the digital
infrastructure well in place, the cost of acquiring and maintaining new
customers has been decreasing as we grow.”

“While
the average daily trading value on Bursa Malaysia has moderated in the third
quarter due to lockdown concerns arising from the resurgence of Covid-19
infections in Malaysia, we remain hopeful that the economy will rebound swiftly
as the roll-out of the national vaccination programme gains momentum.”

“Looking
forward, we will remain focused on strengthening our business fundamentals and
expanding our current offerings to ensure we remain resilient and agile in
responding to the changing needs within the core businesses we operate in.”

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