PROFIT SURGES
Growth driven by higher operating income and lower provisions, says banking group
CIMB Group Holdings Bhd’s earnings surged to RM3.41 billion in the nine months ended September 30 from RM2.71 billion a year ago, driven by higher operating income and lower provisions. MIDF Research says the profit came in at 80.7 per cent of its full-year estimates.
CIMB Group Holdings Bhd’s net profit surged to RM3.41 billion in the nine months ended September 30, from RM2.71 billion a year ago.
The 26 per cent year-on-year growth was driven by higher operating income and lower provisions, said CIMB in a statement yesterday.
Group revenue rose to RM13.11 billion from RM11.75 billion previously.
“We are continuing to show good progress across the group, recording our highest-ever quarterly operating income of RM4.42 billion in the third quarter, and generating a 26 per cent year-on-year growth in ninemonth net profit,” said group chief executive officer Tengku Datuk Seri Zafrul Tengku Abdul Aziz in the statement.
“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,” he added.
MIDF Research analyst Imran Yassin said the nine-month profit was at the upper-end of expectations, at 80.7 per cent of its fullyear estimates.
“Among the key highlight that we believe was the main driver for the 26 per cent year-on-year earnings growth was the doubledigit income growth (11.6 per cent year-on-year).
“Net interest margins remains solid while loan growth continues to pleasantly surprise us,” he told NST Business.
MIDF Research said the group’s businesses in Indonesia and Thailand are improving, and would positively impact CIMB’s margins and loan growth next year.
On the group’s outlook, Tengku Zafrul said: “We remain on track to meet our key financial targets this year. While 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.”
He added that CIMB had received its full banking licence to operate in the Philippines, which marks the completion of its Asean footprint.
Net interest income rose 11.7 per cent in the nine months, thanks to loan growth and improved net interest margin.
CIMB said operating expenses were 6.3 per cent higher year-onyear, but only rose 2.9 per cent after excluding foreign currency translation effects, with the group’s sustained cost management efforts.
Pre-tax profit was 24.6 per cent higher at RM4.57 billion, with loan provisions declining 0.3 per cent year-on-year.
On a quarterly basis, net profit edged up to RM1.13 billion from RM1.02 billion a year ago, while revenue increased to RM4.42 billion from RM4.12 billion.