The Group reported an increase in revenue to RM204.2 million and growth in profit before tax (“PBT“) to RM26.7 million for 1Q24, representing a 13.6% and 115.3% rise respectively relative to 1Q23. Net profit stood at RM22.8 million, reflecting a 119.2% hike against 1Q23. This performance was primarily driven by higher trading and investment income, management fee income and a significant contribution in share of profit from Saudi-Arabia based associate company, Al Wasatah Al Maliah, which recorded an exceptional first quarter.
For the period under review, the Group’s Investment and Wealth Management business reported a boost in revenue to RM54.0 million, a 6% increase from 1Q23, primarily driven by increased management fees income. Furthermore, its Asset Under Administration expanded to RM22.8 billion, up 9.6% from the same quarter last year. PBT for this quarter stood at RM7.6 million.
For its Listed Derivatives business, the enterprise registered a 3.3% growth in revenue to RM6.3 million in 1Q24, largely attributed to higher commission and interest income generated as a result of higher trading activities. PBT stood at RM1.6 million this quarter.
Kenanga’s Stockbroking division solidified its leadership position with a retail market share of 25% and delivered a 20% increase in revenue to RM84.8 million in 1Q24 compared to 1Q23. This growth was attributable to increased trading and investment income, alongside brokerage fee income, buoyed by increased trading volume on the local bourse. Despite the growth, the division registered a marginal loss before tax (“LBT“) of RM1.2 million as a result of impairment provisions on the abnormal sell-down on selected counters in January. We do not expect further credit provisions that would significantly impact equity broking’s financial performance for the rest of the year.
In terms of its Investment Banking division, revenue increased to RM56.3 million vis a vis RM52.5 million in 1Q23, predominantly driven by higher foreign exchange gain. However, it recorded a LBT of RM2.1 million in 1Q24, due to lower net interest income and credit loss expense.
“We remain cautiously optimistic of the outlook for Kenanga Group as we continue to be vigilant in monitoring market uncertainties. Barring any unforeseen external shocks, we expect to see an upward trend in trading volume on Bursa Malaysia as the economy continues its positive trajectory,” said Datuk Chay Wai Leong, Group Managing Director, Kenanga Investment Bank Berhad.
The Group remains a constituent of the FTSE4Good Bursa Malaysia Index, affirming its strong Environmental, Social and Governance (“ESG“) practices. With an ESG rating of 4.0, up from 3.7, Kenanga Group currently ranks 82nd percentile on the prestigious index series.
