CIMB Group net profit in­creases 11% to RM1.1bil

Higher in­ter­est in­come and net non-in­ter­est in­come­boost lender

The Star Malaysia - StarBiz - - News -

PE­TAL­ING JAYA: CIMB Group Bhd’s net profit in­creased 10.6% year-on-year to RM1.13bil in the third quar­ter ended Sept 30, 2017 (Q3’17), boosted by higher in­ter­est in­come and net non-in­ter­est in­come.

In a fil­ing with Bursa Malaysia, the coun­try’s sec­ond-largest lender by as­sets rev­enue said its rev­enue rose by 7.2% to RM4.42bil from RM4.12bil in the same pe­riod a year ago. Earn­ings per share, mean­while, was up to 12.5 sen from 11.74 sen.

Com­ment­ing on the re­sults, CIMB Group chief ex­ec­u­tive of­fi­cer Tengku Datuk Seri Zafrul Aziz said the bank­ing group con­tin­ues to show good progress, record­ing its high­est-ever quar­terly op­er­at­ing in­come of RM4.42bil in 3Q17, and gen­er­at­ing a 26% on-year growth in the nine-months of FY17 (9M’17) net profit.

“The im­proved per­for­mance was un­der­pinned by pos­i­tive net in­ter­est mar­gins, grad­u­ally de­clin­ing pro­vi­sions and health­ier cap­i­tal mar­ket ac­tiv­ity.

“In par­tic­u­lar, our con­sumer bank­ing fran­chise in Malaysia and Thai­land, as well as in­vest­ment and cor­po­rate bank­ing ac­tiv­i­ties con­trib­uted to the re­spectable re­sults for the quar­ter,” Tengku Zafrul said in a state­ment.

On a quar­ter-on-quar­ter (q-o-q) ba­sis, the Q3’17 op­er­at­ing in­come was 2.2% higher at RM4.42bil, un­der­pinned by the 13.6% growth in non-in­ter­est in­come and par­tially off­set by a 2.2% de­cline in net in­ter­est in­come, the bank said.

For the q-o-q pe­riod, con­sumer bank­ing profit be­fore tax (PBT) was up 13.2% mainly due to bet­ter per­for­mance in all coun­tries.

But re­gional com­mer­cial bank­ing PBT de­clined by 69.2% from lower rev­enue and in­creased pro­vi­sions in Q3’17.

Dur­ing that pe­riod, the bank­ing group’s whole­sale bank­ing PBT in­creased by 18.8% mainly due to the bet­ter cap­i­tal mar­kets in Q3’17, lower op­er­at­ing ex­penses and loan pro­vi­sions.

On the other hand, its as­set man­age­ment and in­vest­ments’ PBT was 86.5% lower q-o-q due to the ab­sence of in­vest­ment gains and higher im­pair­ment.

Group fund­ing PBT in­creased by 24.4% due to higher forex gains.

Mean­while, for the nine months pe­riod, earn­ings rose a stronger 26% to RM3.41bil from RM2.71bil in the same pe­riod pre­vi­ously

Rev­enue was up 11.5% to RM13.11bil from RM11.75bil.

For the first nine months of 2017, PBT rose 24.6% to RM4.57bil with loan pro­vi­sions de­clin­ing 0.3% y-o-y.

As for cost-to-in­come ra­tio, it im­proved to 52.1% for 9M’17 from 54.6% in the same pe­riod a year ago with con­tin­u­ous cost man­age­ment dis­ci­pline, while group CET1 ra­tio strength­ened to 120% as of Sept 30, 2017.

On the out­look, Tengku Zafrul said the group re­mained on track to meet its key fi­nan­cial tar­gets for 2017.

“Whilst the tra­jec­tory of re­gional economies is gen­er­ally pos­i­tive and cap­i­tal mar­ket ac­tiv­ity is pick­ing up grad­u­ally, we main­tain our cau­tiously op­ti­mistic out­look and are mind­ful of keep­ing tight con­trols over as­set qual­ity and cost across all busi­nesses.

“We are also pleased to have re­ceived our full bank­ing li­cence to op­er­ate in the Philip­pines, which marks the com­ple­tion of our Asean foot­print,” he added.

Shares of CIMB closed four sen lower to RM5.93 giv­ing it a mar­ket cap­i­tal­i­sa­tion of RM54.7bil.

Tengku Zafrul: We main­tain our cau­tiously op­ti­mistic out­look and are mind­ful of keep­ing tight con­trols over as­set qual­ity.

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