CIMB 9-MONTH PROFIT JUMPS 30.8PC
Record RM4.47b earnings boosted by gains of RM928m from stake disposal
CIMB Group Holdings Bhd posted a record net profit of RM4.47 billion for the nine months ended September 30. The 30.8 per cent rise in yearon-year profit was bolstered by a RM928 million gain on the disposal of its 20 per cent stake in CIMB-Principal Asset Management and 10 per cent stake in CIMB-Principal Islamic Asset Management.
This, in turn, raised the group’s return-on-average equity to 11.6 per cent in the nine months and reduced its cost-to-income ratio to 48 per cent.
Net profit for the third quarter rose 4.2 per cent to RM1.18 billion from RM1.13 billion a year earlier, largely attributed to all segments except wholesale banking.
CIMB said pre-tax profit stood at RM4.76 billion for the nine months, representing a four per cent year-on-year growth.
“Lower operating expenses of 6.4 per cent and loan loss provisions of 30.7 per cent contributed to the group’s increase in ninemonth net profit by 3.6 per cent to RM3.54 billion,” it noted.
This was despite a 5.6 per cent drop in operating income due to the weaker capital market.
“We are pleased to deliver a record pre-tax profit of RM5.69 billion despite the challenging operating landscape. The good performance was underpinned by lower provisions and costs, continued improvement from consumer and commercial banking, as well as a recovery in wholesale banking revenue in the third quarter,” said CIMB Group chief executive officer Tengku Datuk Seri Zafrul Tengku Abdul Aziz in a statement.
On a quarter-on-quarter basis, third-quarter operating income was 5.2 per cent higher at RM4.14 billion, leading to a 13.4 per cent increase in non-interest income.
Consumer banking’s pre-tax profit declined 2.1 per cent quarter-on-quarter from lower operating income and higher costs.
Commercial banking’s pre-tax profit was 1.7 per cent higher quarter-on-quarter due to improved operating income and lower provisions, while wholesale banking’s pre-tax profit was lower by 16.5 per cent largely attributed to higher provisions, as operating income improved in the quarter.
“As the year draws to a close, we remain on track to meet our key T18 targets. However, we remain cautious amid weaker regional economies and global trade tensions.
“Against this backdrop, we will continue to control asset quality and cost across all businesses and geographies while we finalise our next mid-term plan to propel CIMB onto a stronger growth trajectory,” said Tengku Zafrul.