Oct 2006 Financial News

RBTT Financial Holdings Limited Releases Half Year Results

Oct 30, 2006

WISE is a subsidiary of RBTT Financial Holdings Limited

RBTT Financial Holdings Limited (RBTT) reported Earnings Per Share (EPS) of $1.34 for the half year ended September 30, 2006. This was an increase of 4 cents or 3.08 per cent from the corresponding period in 2005. The second quarter earned 71 cents per share which was equal to the EPS of the respective quarter in 2005. Q2-06 on Q1-06 however, showed growth of 12.70 per cent.

According to the Group Chairman, the Group’s core business has continued to grow across all its markets. Total assets grew by 7 per cent, Loans & Advances increased by 8 per cent and Deposits grew by 11 per cent. There were also improved earnings from its Investment Banking business in the second quarter.

Net Interest Income however declined minimally 1.85 per cent to $879.605 million for the half year. With respect to Q2-06 on Q2-05, this item was down 6.02 per cent to $437.985 million. Other Income dropped 3.27 per cent for the half year resulting in a decline in Total Net Income of 2.42 per cent to $1,448.472 million. Quarter on quarter, however, there was growth of 12.05 per cent to $765.384 million in Total Net Income.

The Bank’s Operating Profit grew 5.13 per cent to $570.230 million owing to a decline in the Bank’s Provision for Credit Losses of 90.59 per cent to $8.705 million. Non Interest Expenses rose minimally by 2.36 per cent to $869.537 million. Also impacting positively on the bottom line was the fact that Share of Profits of Associate Companies rose 161.78 per cent to $9.686 million.

Profit Before Tax ultimately rose 6.20 per cent to $579.916 million with the second quarter contributing 52.28 per cent. The Effective Tax Rate increased from 18.62 per cent (HY-05) to 20.50 per cent (HY-06) while Profit After Tax rose 3.74 per cent to $461.020 million. This represents growth of 12.27 per cent from Q1-06.

The Board has declared an interim dividend of 60 cents (2005-55 cents) to be paid on November 24, 2006 to shareholders on record as at November 10 ,2006.

The Chairman’s outlook for the remainder of the year is for an improved rate of profit growth as business conditions continue to be favourable in its major markets. At the current price of $25.97 and WISE’s forecasted EPS of $2.95, RBTT is trading at an attractive price/earnings ratio of 8.80 times earnings. Given that this share usually trades between 10 to 13 times earnings, we maintain our BUY recommendation on this share.


Sreshtha Tewari
WISE Research Team