CIMB’s first quarter net profit rises 40%

PETALING JAYA: CIMB Group Holdings Bhd’s net profit expanded 40.28% to RM813.8 million for the first quarter ended March 31, 2016 against RM580.12 million in the same period last year, buoyed by higher net interest income and lower loan provisions.
Its revenue, however, was flat at RM3.73 billion compared with RM3.68 billion a year ago.
In a filing with the stock exchange, CIMB said its total gross loans (excluding the bad bank) grew 7.5% or 5.6% excluding forex fluctuations driven by consumer banking, with gross impairment ratio reducing to 3.0% as at March 2016 from 3.2% in March 2015.
Its net interest margins were lower at 2.62%, mainly due to the higher cost of deposits in Malaysia.
As at end-March 2016, CIMB’s total capital ratio stood at 15.4% while the common equity tier-1 capital ratio strengthened to 10.6%.
Its non-Malaysia profit before tax (PBT) contribution increased to 26% in Q1 2016 compared with 20% in Q1 2015, mainly due to the 158.3% improvement in Indonesia’s PBT to RM124 million in line with lower provisions at CIMB Niaga.
Commenting on business prospects, CIMB CEO Tengku Datuk Zafrul Tengku Abdul Aziz said the group is still cautious on overall balance sheet growth, with a focus on cost management, asset quality, capital management and governance, given the slower regional economies and persistent market volatility.
For the rest of 2016, he expects a slower growth environment at CIMB Malaysia, but CIMB Niaga is expected to gradually improve.