128 Additional Information We Are Kenanga Message From Our Leaders Our Sustainability Approach How We Are Governed Financial Statements Shareholders’ Information INVESTMENT BANKING Investment Banking registered a lower PBT of RM15.8 million for FYE22 (FYE21: PBT of RM20.6 million) mainly due to lower net interest income generated and higher operating expenses and credit loss expenses. INVESTMENT AND WEALTH MANAGEMENT Investment and Wealth Management registered marked improvement in PBT of RM54.2 million for FYE22 (FYE21: PBT of RM34.9 million) which was achieved on the back of higher contribution from alternative products. LISTED DERIVATIVES The Listed Derivatives segment has turned around and recorded a PBT of RM2.1 million for FYE22 compared to loss before tax (“LBT”) of RM1.8 million for FYE21 as a result of higher trading activities and higher interest income generated. MONEY LENDING AND FINANCING The Money Lending and Financing business reported a lower PBT of RM0.1 million for FYE22 compared to PBT of RM1.6 million for FYE21 mainly due to the provision of credit loss expense for an impaired loan. CAPITAL RATIOS The Group and the Bank remain on strong financial footing with total capital ratios of 28.913% (FYE21: 28.291%) and 30.682% (FYE21: 29.827%) respectively, well above the minimum prescribed by Bank Negara Malaysia (“BNM”) of 10.5% including capital conservation buffer of up to 2.50%. OUTLOOK AND PROSPECTS FOR 2023 As we move into 2023, we expect continued growth as the economy normalises, with a projected GDP of 4.3%. We believe there is some upside given the lower political risk, resilient private spending and the positive impact of China’s relaxation of its zero-COVID policy. In addition, a further pick-up in tourism activity will continue to support the recovery in the services sector as well as further improvement in the labour market condition. From monetary policy perspective, we expect BNM to keep the overnight policy rate (“OPR”) unchanged at 2.75% and a rate change will depend on the inflation trend and growth outlook. Overall, we are cautiously positive of the outlook for Kenanga in 2023 and the Group is committed to driving collaboration, innovation, digitalisation and sustainability in the marketplace to ensure continued growth in profitability and market share. DIRECTOR’S REPORT
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