CIMB RECORDS RM1.2B NET PROFIT

Lender proposes dividend of 4.81 sen per share amounting to RM477m, or payout ratio of 40ppc

CIMB Group Holdings Bhd expects group loans to grow between four and five per cent this year, coming mostly from the consumer segment across the group’s operation, particularly in Indonesia and Malaysia.

Its Malaysian segment saw a loan contraction of one per cent year-on-year in its financial year 2020.

“We believe that demand from consumers will remain strong,” said CIMB group chief executive officer Datuk Abdul Rahman Ahmad at the virtual briefing on the lender’s financial results yesterday.

He said the bank was maintaining a cautious growth stance for this year.

He said CIMB’s shorter term focus was on the economic impact of the Covid-19 pandemic and continued assistance to vulnerable segments.

“Enhanced risk management, prudent cost optimisation and targeted investments across the business will remain priorities. We expect recovery this year to be driven by top line growth and lower provisioning,” he added.

CIMB’s net profit fell 73.9 per cent to RM1.19 billion in the financial year ended Dec 31 last year from RM4.56 billion in 2019.

Revenue decreased 3.4 per cent to RM17.19 billion from RM17.80 billion in 2019.

For the fourth quarter, the group’s net profit fell 74.7 per cent to RM214.98 million from RM848.64 million in the same period in 2019 but revenue grew 5.6 per cent to RM4.72 billion from RM4.52 billion previously.

This was underpinned by a 3.8 per cent increase in net income interest to RM12.73 billion year-on-year and 10.3 per cent noninterest income growth to RM4.46 billion, it said.

It proposed a dividend of 4.81 sen per share amounting to a total of RM477 million, or a payout ratio of 40 per cent.

The group said its performance last year was largely affected by the pandemic, which led to elevated loan provisions arising from accounting adjustments incorporating macroeconomic factors and management overlays, as well as specific provisions made against Covid-19 related and legacy accounts.

CIMB said pre-provisioning operating profit declined marginally by one per cent to RM8.21 billion, while operating income slipped 3.4 per cent to RM17.19 billion.

It said an aggressive cost-reduction exercise resulted in a 5.5 per cent, or RM524 million, decrease in operating expenses and an improved cost-to-income ratio of 52.2 per cent.

“Top line resilience, cost discipline and proactive measures to protect asset quality have enabled the group to strengthen its financial position,” it added.