CIMB profit shoots up 45% in Q1

KUALA LUMPUR: CIMB Group Holdings Berhad yesterday posted a 45% jump in first-quarter profit to a record as Malaysia’s second-largest lender by assets made more profitable loans at home, boosted income from non-lending activities and took lower provisions.

Malaysia’s economy is strengthening in 2017 after a period of tepid growth caused by a downturn in commodity prices and the shadow of a corruption scandal involving state-owned fund 1Malaysia Development Berhad.

That is benefitting CIMB and its bigger rival Malayan Banking Bhd, which will report results today.

CIMB reported a net profit of 1.18 billion ringgit ($274.39 million) for January-March compared to 813.8 million ringgit a year ago. That beat an average 803.5 million ringgit estimate of two analysts surveyed by Reuters.

“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,” group chief executive Zafrul Aziz said in a statement.

CIMB’s net interest income for the quarter rose 11.5% as loans grew 12.2% and net interest margin (NIM) improved to 2.72% from 2.62% in the year-ago quarter. Noninterest income surged 32.3%.

CIMB’s regional operations overall were steady, with the non-Malaysia business contributing 28% of the group’s profit before tax (PBT) in the quarter compared to 26% a year ago.

The Indonesian unit, CIMB Niaga, a bugbear previously, has improved its performance and helped the Southeast Asian nation’s PBT for CIMB soar 135.5% to 292 million ringgit.