CIMB records best ever quarterly earnings
Its Q1 net profit jumps to RM1.18bil from RM813mil a year ago
KUALA LUMPUR: CIMB Group Holdings Bhd kicked off its current financial year with its best ever quarterly earnings, signalling a healthier regional economic and capital market activity outlook.
The second largest financial institution in the country by asset size posted its highest quarterly earnings at RM1.18bil in tandem with the gradually improving regional economic conditions and capital market activity.
Its net profit for the first quarter ended March 31 jumped by 45% from RM813mil a year ago while its revenue increased 17% to RM4.36bil from RM3.725bil largely driven by a 32.3% growth in non-interest income.
Earnings per share were 13.31 sen. However, it did not declare any dividend for the quarter.
“We had a good start to 2017, recording our highest ever quarterly net profit of RM1.18bil in 1Q17 in tandem with the gradually improving regional economic conditions and capital market activity.
“Our main business units are gaining traction, with cost management initiatives continuing to show progress and asset quality showing sustained improvement.
“Better capital and balance sheet management have brought about a more focused growth, improved margins, a healthier current and savings accounts ratio and a strengthened capital position,” said group chief executive Tengku Datuk Seri Zafrul Aziz in a statement yesterday.
CIMB Group’s net interest income rose 11.5% from loans growth and improvement in net interest margin (NIM) while operating expenses were 7.4% higher year-on-year (y-o-y).
However after taking into account foreign currency translation effects, operating expenses were only 3.9% higher as the group’s cost management initiatives continue to show progress.
The group’s first quarter loan to deposit ratio stood at 91.7% compared with 90.6% in the corresponding quarter last year.
Its gross impairment ratio was higher at 3.2% as at end-March from 3% in March 2016, with an allowance coverage of 79.6%.
The group’s cost-to-income ratio improved to 52.6% compared with 57.4% a year ago, in line with the stronger revenues and controlled cost increases.
The group’s NIM improved to 2.72% in the first quarter from better liability management in Indonesia, Thailand and Singapore.
Meanwhile, non-Malaysia pre-tax profit contribution to the group rose to 28% for the quarter under review compared to 26% a year ago.
Indonesia’s pre-tax profit expanded by 135.5% y-o-y to RM292mil in line with CIMB Niaga’s improving financial performance.
Thailand’s pre-tax profit contribution of RM102mil was 15.9% higher y-o-y as a better allround operating performance offset the higher yoy commercial banking provisions.
Total pre-tax profit contribution from Singapore was 121% higher at RM137mil on the back of improved revenues and lower loan loss provisions.
“Our first quarter results are testament to the stronger foundations that we have built since we embarked on our T18 Strategy.
“The strong start to the year also provides the impetus for us to continue embedding the 5Cs – capital, cost, culture, customer experience and compliance – across all our T18 programmes.
“We will continue to keep a tight rein on cost, strive to enhance operating income whilst expecting improvement in asset quality.
“Looking ahead, the group is cautiously optimistic for the rest of 2017, with more stable economic conditions, increased regional activity, improved capital markets and declining provisions across our key geographies.
“The group is currently on track to achieve its key financial targets for 2017,” said Tengku Zafrul.