02 / LEADERSHIP STATEMENT 01 03 04 05 06 07 08 09 15 Page 17 Page 18 Page 19 Page 20 Stockbroking Investment Banking Asset and Wealth Management Listed Derivatives Business SEGMENTAL REVIEW GROUP MANAGING DIRECTOR’S MANAGEMENT DISCUSSION AND ANALYSIS Overview For the financial year ended 31 December 2025 (“FY2025”), the Group recorded total Revenue of RM865.3 million and Profit Before Tax and Zakat of RM73.6 million, with Net Profit amounting to RM50.0 million. These results reflect the realities of a challenging market environment, characterised by cautious investor sentiment that softened brokerage and management fee income. Nonetheless, improved trading and investment income, higher net interest income and the recovery of credit provisions supported a stable overall performance, reinforcing our commitment to disciplined execution. Across the Group, key business segments delivered relatively strong operational performance in 2025, demonstrating management agility, market responsiveness and a strong capacity to capitalise on opportunities despite a complex operating landscape. The Investment Banking division achieved a robust performance during the year, underpinned by strong Treasury results and the recovery of credit provisions. The stronger Treasury business was supported by favourable interest rate conditions and active management of foreign exchange exposures within a stable domestic monetary policy environment, enabling the team to deliver risk-adjusted outcomes across trading and liquidity activities. Notably, the Group’s Listed Derivatives business delivered another standout performance, recording its strongest profit in over a decade, driven by sustained market volatility and high participation in key contracts, particularly the Bursa Malaysia Derivatives Crude Palm Oil Futures. This outstanding result is attributable to the ongoing success in broadening market participation through client engagement and efforts to enhance product accessibility and market education, set against a Malaysian derivatives market that achieved a second consecutive year of record volumes, with total annual trading volumes reaching 22.3 million contracts. Our focus on strategic execution is complemented by the ongoing integration of sustainability considerations across operations and decision-making. This approach continues to be recognised externally, with Kenanga Group remaining a constituent of the coveted FTSE4Good Bursa Malaysia Index with an ESG score of 4.3, which placed the Group as the highest scoring financial institution on the Index and in the 94th percentile among Malaysian public listed companies. Among the many accolades we received during the year, we were recognised at the Minority Shareholders Watch Group’s National Corporate Governance & Sustainability Awards, the National Annual Corporate Report Awards and The Edge Malaysia ESG Awards, underscoring our dedication to responsible value creation and building the Group’s long-term resilience. Financial Position As at 31 December 2025, the Group and Company maintained strong Total Capital Ratios of 21.8% and 24.3%, respectively, well above Bank Negara Malaysia (“BNM”)’s minimum regulatory requirement of 10.5%, which includes a capital conservation buffer of 2.5% if imposed. Our liquidity position remained robust, with a Liquidity Coverage Ratio of 201%, exceeding the 100% regulatory threshold, while our Net Stable Funding Ratio stood at 120%, also surpassing the mandatory minimum. The Group sustained its A+ and MARC-1 ratings from the Malaysian Rating Corporation Berhad (“MARC”), with a positive long-term rating outlook, reflecting our ongoing efforts to strengthen financial resilience and maintain our standing in the market. Additionally, our subsidiaries, Kenanga Investors Berhad (“KIB”) and Kenanga Islamic Investors Berhad (“KIIB”), retained their MARC IMR-2 ratings, underscoring our disciplined investment processes and sound risk management practices.
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