CIMB sees record year
Second half 2018 results expected to be at least same as first half or better
KUALA LUMPUR: CIMB Group Holdings Bhd, the country’s second-largest lender by asset size, is bullish on 2018 and expects a record year in terms of profit.
“The first half has been good and we hope our performance will sustain in the second half. We are just two months into the second half and it has been quite a strong two months. We are also seeing a pick-up in the capital markets. Also in the region, in countries such as Thailand and Singapore, we are seeing strong improvement as well,” group chief executive officer Tengku Datuk Seri Zafrul Aziz told reporters at a press conference yesterday.
“We are certainly optimistic. Judging from the pipeline that we have moving forward, we should see at least the same if not a better performance in the second half,” he added.
In the first half to end-June, CIMB’s net profit jumped 43.9% to a record RM3.29bil from RM2.28bil before. Its revenue increased by 5.5% to RM9.16bil from RM8.68bil.
The bank said its first-half earnings were boosted by a gain from the sale of 20% of CIMB-Principal Asset Management and 10% of CIMB-Principal Islamic Asset Management amounting to RM928mil.
Tengku Zafrul said its performance for the first half had alsobeen supported by its consumer banking division, noting that the Malaysian operations for the consumer side have been strong, while the commercial banking was also in good stead.
In its latest reported second quarter ended June 30, the bank posted a record net profit of RM1.98bil, an 80% increase compared to the RM1.10bil posted a year ago.
However, stripping out the gain from the sale of the 20% of CIMBPrincipal Asset Management and 10% of CIMB-Principal Islamic Asset Management, CIMB’s net profit actually fell by 4.5%.
It said that revenue rose by 12.4% to RM4.86bil from RM4.33bil. Earnings per share was at 21.29 sen compared with 12.25 sen previously.
The bank said it recorded an overall year-on-year (y-o-y) loan growth figure of 3.4% for the group in the first half of the year consisting of 4.0% for consumer banking, 1.4% for commercial banking and 3.1% for wholesale banking.
Tengku Zafrul said the overall loan growth figure was impacted by Indonesia due to the negative effects from a foreign exchange (forex) translation, while the Malaysian consumer had been strong and this helped buoy its loan growth figure.
“Our loan growth target for the full year is about 6%. If we did not have the forex impact from the weakened rupiah in the first half, the loan growth would have actually gone up by 7% this year,” he said.
He said notably that loan growth from the Malaysian consumer was attributed to a growth in mortgages of 10%.
“The residential property sector is picking up again. The main component of the consumer loans is mortgages and it is still our biggest portfolio for the segment. I am not really surprised by the strong performance on the consumer banking side after taking into account the tax holiday,” Tengku Zafrul said.
The bank said in its statement that its consumer banking pre-tax profit grew 20.2% y-o-y from sustained business momentum and better cost management.
Commenting on its net interest margin (NIM), Tengku Zafrul said that this figure was at about 2.5% now, which was slightly lower than last year.
Tengku Zafrul: The residential property sector is picking up again.