KENANGA INVESTMENT BANK BERHAD INTEGRATED ANNUAL REPORT 2024 WE ARE KENANGA OUR SUSTAINABILITY APPROACH LEADERSHIP STATEMENT HOW WE ARE GOVERNED OUR VALUE CREATION APPROACH FINANCIAL STATEMENTS SHAREHOLDERS’ INFORMATION ADDITIONAL INFORMATION 145 144 BUSINESS REVIEW FOR 2024 The profit before taxation (“PBT”) of the Group and of the Bank for the financial year ended 31 December 2024 (“FYE24”) were RM117.2 million and RM85.2 million, compared to PBT of RM88.1 million and RM58.7 million, respectively, in the previous financial year (“FYE23”). The performance of the Group’s respective business segments are analysed below: STOCKBROKING Stockbroking division achieved higher operating profits of RM17.2 million for FYE24 as compared to operating loss of RM4.3 million last year on the back of higher net brokerage and trading income. Due to several market events, credit provisions of RM5.7 million was incurred for current year as compared to reversals from recovery last year. Consequently, PBT of RM15.4 million was registered for FYE24 (FYE23: RM16.1 million). INVESTMENT BANKING Investment Banking registered a higher PBT of RM6.2 million for FYE24 (FYE23: PBT of RM5.7 million) mainly due to higher investment banking fee income but partially offset by higher interest expenses incurred during the year. ASSET AND WEALTH MANAGEMENT With strong growth in assets under management (“AUM”) for institutional and retail sectors, Asset and Wealth Management registered management and performance fees income of RM294.1 million and PBT of RM47.0 million in FYE24 respectively. LISTED DERIVATIVES The Listed Derivatives segment has reported a higher PBT of RM7.8 million for FYE24 (FYE23: PBT of RM6.2 million) largely due to the higher trading commission earned and the interest income generated during the year on the back of higher trading activities in the listed derivatives market. CAPITAL RATIOS The Group and the Bank remain on strong financial footing with total capital ratios of 22.967% (FYE23: 29.433%) and 24.736% (FYE23: 31.565%) respectively, well above the minimum prescribed by Bank Negara Malaysia (“BNM”) of 10.5% including capital conservation buffer of 2.50%. OUTLOOK AND PROSPECTS FOR 2025 The Malaysian economy is set for stable growth in 2025, supported by strong domestic demand. Growth will be driven by sustained expansion in the services and manufacturing sectors, supported by rising household incomes, increased tourist arrivals, ongoing technology upcycle, materialisation of previously approved investment, and record-high allocations under Federal Budget 2025. Gross Domestic Product (“GDP”) is projected to grow by 4.8% (2024: 5.0%), reflecting the moderation from a high base in 2024 and normalised economic activity. Nonetheless, growth faces external downside risks. These include the prospect of slower growth in advanced economies, uncertainties surrounding China’s economic recovery, prolonged geopolitical tensions in the Middle East and Eastern Europe, as well as renewed trade disputes amid policy shifts under the new US administration. On monetary policy, Bank Negara Malaysia (“BNM”) is expected to keep the Overnight Policy Rate (“OPR”) at 3.00% throughout 2025. Despite rising inflationary pressures from the impact of subsidy rationalisation, BNM is expected to prioritise supporting economic growth and aligning it with structural reforms and initiatives under the Madani government. The Group is cautious about the outlook for 2025, as uncertainties from external factors are expected to weigh heavily on Malaysia’s capital market. It will maintain prudent management practices while actively pursuing its digitalisation strategy. INDEMNIFICATION OF DIRECTORS AND OFFICERS The Bank has maintained a Directors and Officers Liability Insurance on a group basis up to the aggregate limit of RM30.0 million against any legal liability incurred by the Directors and Officers in the discharge of their duties while holding office for the Group. The Directors and Officers shall not be indemnified by such insurance for any gross negligence, fraud, intentional breach of law or breach of trust proven against them. The total amount of insurance premium paid for the Directors and Officers of the Group and of the Bank for the current financial year were RM59,000 and RM44,238, respectively. DIRECTORS The names of the Directors of the Bank in office since the beginning of the financial year and at the date of this report are: Tan Sri Dato’ Seri Syed Zainol Anwar Ibni Syed Putra Jamalullail (Independent Non-Executive Director/Chairman) Ismail Harith Merican (Non-Independent Non-Executive Director) Luk Wai Hong, William (Non-Independent Non-Executive Director) Jeremy Bin Nasrulhaq (Senior Independent Non-Executive Director) Norazian Binti Ahmad Tajuddin (Independent Non-Executive Director) Kanagaraj Lorenz (Independent Non-Executive Director) Choy Khai Choon (Non-Independent Non-Executive Director) Chin Siew Siew (Independent Non-Executive Director) Angeline-Ong Su Ming (appointed on 4 June 2024) (Independent Non-Executive Director) The names of the Directors of the subsidiaries who served the respective Boards of the subsidiaries since the beginning of the current financial year to the date of this report are disclosed in Note 54 to the financial statements. In accordance with Clause 78 of the Bank’s Constitution, Jeremy Bin Nasrulhaq, Norazian Binti Ahmad Tajuddin and Choy Khai Choon will retire by rotation at the forthcoming Annual General Meeting and, being eligible, offer themselves for re-election. Additionally, Angeline-Ong Su Ming, who was appointed as an additional Director, will retire under Clause 84 of the Bank’s Constitution at the same meeting and, being eligible, offer herself for re-election. DIRECTORS’ REPORT DIRECTORS’ REPORT
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