CIMB Group Q3 net profit jumps more than 10%

PETALING JAYA: CIMB Group Holdings Bhd’s net profit for the third quarter ended Sept 30, 2017 (3Q’17) was up 10.7% on increased operating income and lower provisions and taxation.
The group made a net profit of RM1.1 billion for the quarter under review, compared with RM1.0 billion for the quarter ended Sept 30, 2016 (3Q’16).
This was on 7.3% higher revenue of RM4.42 billion, compared with RM4.12 billion for 3Q’16.
CIMB Group 3Q’17 operating income was 11.30% higher at RM4.4 billion buoyed by the 17.1% growth in non-interest income and 6.4% growth in net interest income for the quarter compared with 3Q16.
Consumer banking profit before tax (PBT) was 36.4% higher year-on-year (y-o-y), while regional commercial banking PBT declined by 62.4%.
Wholesale Banking PBT, however, jumped 44.2 compared with 3Q’16.
Net profit for the nine-month period ended Sept 30, 2017 (9M’17) was 26.9% higher at RM3.4 billion, compared with RM2.7 billion for the same period in 2016.
This was on 11.6% jump in revenue to RM13.1 billion, compared with RM11.8 billion for the nine-month period in 2016.
“We are continuing to show good progress across the group, recording our highest ever quarterly operating income of RM4.4 billion in 3Q’17, and generating a 26.0% y-o-y growth in 9M17 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,” said CIMB Group chief executive Tengku Datuk Seri Zafrul Aziz in a statement.
The group’s total gross loans (excluding the bad bank) grew by 7% y-o-y, while total deposits grew 4.5% y-o-y. The group’s Loan to Deposit Ratio (LDR) stood at 92.0% compared to 89.8% in 9M’16.
The group’s gross impairment ratio stood at 3.5% as at end-September 2017, with an allowance coverage of 72.4%. The group’s cost-to-income ratio improved to 52.1% compared with 54.6% in 9M’16, in line with stronger revenues and sustained cost management. The group’s net interest margin improved to 2.67% for 9M’17 from better liability management across all countries.
“We remain on track to meet our key financial targets for 2017.
“While 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,” said Tengku Zafrul.
The group’s share price closed four sen lower to RM5.93 with some 11 million shares changing hands.