RCE Capital sees disbursement rebound ahead

PETALING JAYA: Despite recent civil servants’ salary hike, RCE Capital Bhd’s third quarter of financial year 2025 (3Q25) results came in below expectations given poor credit quality of most applicants that stymied growth.

Maybank Investment Bank (Maybank IB) Research said the group’s core net profit of RM30.8mil in 3Q25 brought nine months of the financial year 2025 (9M25) core net profit to RM88.9mil or only 61% and 67% of both its and consensus estimates.

“We had expected 3Q25 core net profit of about RM35mil as the civil servants’ salary hike took effect in December 2024.

RCE Capital is mainly involved in syariah-compliant and conventional financing services. The group explained that it is still cautious on disbursements due to poor credit quality of many applicants, thus leading to less fee income.

While disbursements accelerated in January this year, they have been decelerating in February.

RCE Capital said it hopes that disbursements will reaccelerate in March due to civil servants spending ahead of Hari Raya Aidilfitri celebrations, which commences on March 30.

“Until then, RCE Capital will refrain from guiding on financing growth going forward,” added Maybank IB Research.

The group’s 9M25 year-to-date financing growth eased to 2.5%, below the research house’s 5% financial year 2025 (FY25) assumption.

As a result of slower financing growth and lower fee income, Maybank IB Research stated, “We trim FY25, FY26, and FY27 earnings per share by 11%, 11%, and 10%, respectively.”

On another note, the 3Q25 filing reveals that RCE acquired Corewealth Alliance Dynamic (CAD) for RM27mil. CAD’s core business is similar to RCE Capital.

RCE Capital explained that it acquired CAD to secure its Angkasa Code, which allows it to deduct the salaries of civil servants automatically for repayment.