KUALA LUMPUR: RHB Bank Bhd expects the strengthening of the ringgit to continue and hover between 4.35 and 4.50 against the US dollar this year.
Managing director and chief executive officer Mohd Rashid Mohamad said the ringgit has shown commendable performance, being one of the strongest currency in terms of appreciation to date. "The investments that come in also help in strengthening the ringgit. This strengthening will continue and we expect the ringgit to trend between RM4.35 and RM4.50 to US dollar at the end of the year. "There is still potential for volatility but if the US Federal Reserve cut rates, there is potential for the ringgit to strengthen further," he told a press conference following the release of its second quarter financial results.
The bank also expects Malaysia's economic growth to remain resilient in the second half of 2024 (2H24) with an expansion of 4.9 per cent in the latter half of the year.
This is expected to bring total gross domestic product (GDP) to reach 5.0 per cent.
Mohd Rashid said key drivers for the growth include sustained household spending, robust investment activities and strong performance in trade and tourism.
Inflation is poised to remain under control, with a full-year price pressure at 2.1 per cent.
Commenting on the diesel subsidy rationalisation, Mohd Rashid said the bank has yet to see any positive or negative correlation to its performance.
"Since the rollout of diesel rationalisation, we are unable to correlate between subsidies that were taken away to the performance of our borrowers."
"This is also given the fact that we do not see much increment in inflation on a quarterly basis, after the subsidy rationalisation. The impact of diesel rationalisation on inflation is minimal; expected to remain subdued for the rest of this year," he said.
The bank's net profit slipped 10.7 per cent year-on-year (YoY) to RM722.31 million in the second quarter ended June 30, 2024 (Q2 2024) versus RM808.7 million in Q2 2023 due to higher operating expenses and higher allowances for credit losses.
Revenue for the period, however, rose 9.2 per cent YoY to RM4.42 billion from RM4.05 billion in the same period last year.
For the first half ended June 30, 2024 (1H24), its net profit dropped 7.5 per cent to RM1.45 billion compared to RM1.57 billion a year ago.
The lender said the decline was mainly due to higher allowances for credit losses, higher operating expenses and higher share of loss in associates, offset by higher non-fund based income, higher net funding income and lower tax expense.
Revenue rose 10.7 per cent to RM8.82 billion in the period under review from RM7.97 billion a year ago.
-end -