CIMB Group net profit increases 11% to RM1.1bil
Higher interest income and net non-interest incomeboost lender
PETALING JAYA: CIMB Group Bhd’s net profit increased 10.6% year-on-year to RM1.13bil in the third quarter ended Sept 30, 2017 (Q3’17), boosted by higher interest income and net non-interest income.
In a filing with Bursa Malaysia, the country’s second-largest lender by assets revenue said its revenue rose by 7.2% to RM4.42bil from RM4.12bil in the same period a year ago. Earnings per share, meanwhile, was up to 12.5 sen from 11.74 sen.
Commenting on the results, CIMB Group chief executive officer Tengku Datuk Seri Zafrul Aziz said the banking group continues to show good progress, recording its highest-ever quarterly operating income of RM4.42bil in 3Q17, and generating a 26% on-year growth in the nine-months of FY17 (9M’17) net profit.
“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,” Tengku Zafrul said in a statement.
On a quarter-on-quarter (q-o-q) basis, the Q3’17 operating income was 2.2% higher at RM4.42bil, underpinned by the 13.6% growth in non-interest income and partially offset by a 2.2% decline in net interest income, the bank said.
For the q-o-q period, consumer banking profit before tax (PBT) was up 13.2% mainly due to better performance in all countries.
But regional commercial banking PBT declined by 69.2% from lower revenue and increased provisions in Q3’17.
During that period, the banking group’s wholesale banking PBT increased by 18.8% mainly due to the better capital markets in Q3’17, lower operating expenses and loan provisions.
On the other hand, its asset management and investments’ PBT was 86.5% lower q-o-q due to the absence of investment gains and higher impairment.
Group funding PBT increased by 24.4% due to higher forex gains.
Meanwhile, for the nine months period, earnings rose a stronger 26% to RM3.41bil from RM2.71bil in the same period previously
Revenue was up 11.5% to RM13.11bil from RM11.75bil.
For the first nine months of 2017, PBT rose 24.6% to RM4.57bil with loan provisions declining 0.3% y-o-y.
As for cost-to-income ratio, it improved to 52.1% for 9M’17 from 54.6% in the same period a year ago with continuous cost management discipline, while group CET1 ratio strengthened to 120% as of Sept 30, 2017.
On the outlook, Tengku Zafrul said the group remained on track to meet its key financial targets for 2017.
“Whilst 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.
“We are also pleased to have received our full banking licence to operate in the Philippines, which marks the completion of our Asean footprint,” he added.
Shares of CIMB closed four sen lower to RM5.93 giving it a market capitalisation of RM54.7bil.
Tengku Zafrul: We maintain our cautiously optimistic outlook and are mindful of keeping tight controls over asset quality.