Friday, November 19, 2010

New financing products, stronger demand boost RCE bottomline by 65%

KUALA LUMPUR: RCE CAPITAL BHD [] earnings rose 65% to RM31.24 million in the second quarter ended Sept 30, 2010 underpinned by stronger demand for its new Syariah-based financing products and expected its performance to improve for the rest of the year.

RCE, which provides personal loans and consumer-financing services to public and private sector employees, said on Friday, Nov 19 revenue rose 24.6% to RM74.62 million from RM59.88 million a year ago. Earnings rose to RM31.24 million from RM18.91 million.

'The improved level of revenue is in tandem with the increase in the group's loan disbursements and refinancing activities,' it said, adding the growth was substantially driven by stronger demand from existing and new customers as well as offering of newly improved Syariah-based financing products.

The group's resilient results translate into earnings per share of 3.99 sen in the current quarter, an improvement of 58% compared to 2.52 sen in the previous year's corresponding quarter.

RCE Capital recorded strong growth in its net loan receivables, up RM42.8 million from a year ago, despite the change in accounting treatments adopted for interest income and loan impairment in line with FRS139 Financial Instruments: Recognition and Measurement. This signifies the Group's focus in growing its lending activities.

'RCE Group will continue to pursue its marketing and product diversification strategies with a view of expanding market penetration and identifying new market segments. Barring any unforeseen circumstances, the group is optimistic of improving its performance for the rest of the year,' it said.

On the corporate front, it recently issued its ninth tranche of asset-backed securities totalling RM83.8 million which was accorded AAA-rating by RAM Ratings Services Bhd.


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