Kenanga Investment Bank net profit surges 4-fold to RM64.7m in H1

This reflects an almost four-fold increase from the same period last year.

Independent investment bank, Kenanga Investment Bank Berhad, reported a net profit surge of RM64.7m ($15.45m) for the first half of 2021, an almost four-fold increase from RM13.5m ($3.22m) for the same period last year.

Kenanga Investment Bank said that net profit increased by 49.4% to $7.30 for the second quarter (Q2) compared to $4.89m in the first quarter.

Consolidated revenue for Q2 2021 stood at $50.75m. Meanwhile, annualised Return on Equity is at 12.8%, compared to full-year 2020 of 10.7%.

The bank attributed its positive earnings to higher contributions from its stockbroking and investment and wealth management businesses, as well as a 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 $4.77m in Q2 2021, as compared to $3.27m in the same period last year. The improvement was mainly due to higher net interest income, as well as trading and investment income.

Additionally, PBT contribution from the investment and wealth management division more than doubled to $1.48m due to higher management fee income generated on the back of increased assets under management and sales agency force.

Rakuten Trade, the group’s joint venture and Malaysia’s first full-fledged online equity broker, continued to record a solid average monthly account opening at 6,800 accounts for Q2 2021. 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.

“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,” said Kenanga Investment Bank Berhad's Managing Director Datuk Chay Wai Leong.

Chay said that whilst the average daily trading value on Bursa Malaysia has moderated in the third quarter due to lockdown after rising concerns for the resurgence of COVID-19 infections, they remain hopeful that the economy will rebound swiftly as the roll-out of the national vaccination programme gains momentum.