Thursday, October 29, 2020

Higher income, lower loan loss provision boost CIMB

Aug 29. 2019
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By THE NATION

CIMB Group Holdings Berhad reported a profit of RM3.56 billion (Bt25.84 billion) before tax, for the first half of 2019.

The 8.7 per cent year on year increase was underpinned by stronger operating income and a 15.7 per cent decline in year on year loan loss provision while operating expenses rose 8.7 per cent year on year. The group’s net profit in the first half was 14.5 per cent higher year on year at RM2.70 billion, translating to a net earnings per share of 28.1 sen and an annualised return on average equity of 9.7 per cent.

The group declared a first interim net dividend of 14.0 sen per share, to be paid via cash or an optional dividend reinvestment scheme. The total interim dividend amounts to a payment of approximately RM1.36 billion, translating to a dividend payout ratio of 50.4 per cent of profits in the first half of 2019.

“We are pleased with the 14.5 per cent year on year increase in our net profit to RM2.70 billion underpinned by our above-industry loan growth in Malaysia and better treasury and markets income.

Malaysia’s PBT improved 5.3 per cent year on year, contributing 67 per cent to the group’s PBT. Indonesia also posted an encouraging 20.2 per cent year on year growth, supported by its strong consumer business. Overall, the group remained resilient with lower loan loss provisions despite challenging external headwinds,” said Tengku Dato Sri Zafrul Aziz, CEO, CIMB Group.

The group’s operating income in the first half of this year was 4.8 per cent higher year on year at RM8.64 billion. Net interest income grew 3.3 per cent year on year from the 6.9 per cent growth in loans, while the 8.5 per cent improvement in non-interest income came largely on the back of better capital market activity in the second quarter of 2019. Operating expenses rose 8.7 per cent year on year from incremental investments and Forward23-related expenses, bringing about a cost-to-income ratio of 53.2 per cent . Loan loss provisions declined by 15.7 per cent to RM629 million resulting in an 8.7 per cent growth in the group’s PBT to RM3.56 billion.

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