CIMB’s Q3 net profit contracts 14.4% from higher expenses

PETALING JAYA: CIMB Group Holdings Bhd’s net profits fell by 14.4% to RM1.01 billion in its third quarter ended Sept 30, 2019 against a net profit of RM1.18 billion reported in the same quarter of the previous year attributed to higher operating expenses and provisions despite an increase in operating income.

In the quarter, the group’s revenue rose by 12% to RM4.64 billion from RM4.14 billion reported previously.

CIMB’s group CEO, Tengku Datuk Sri Zafrul Aziz (pix) commented that he is pleased to see the group’s underlying performance remained strong despite the challenging environment.

“The better performance was driven by higher net interest income and non-interest income, coupled with lower provisions. Our balance sheet growth remained strong with loans and deposits growing steadily, driven by our Malaysian consumer business,” he said in a press statement

In the first nine months of 2019, the group’s net profits fell 16.9% to RM3.71 billion from RM4.47 billion reported in the same period of the previous year.

Meanwhile, revenue contracted slightly by 0.3% to RM13.27 billion from RM13.31 billion reported, previously.

The group added that CIMB Niaga should see improved performance going forward.

For the first nine months of the year it recorded a 7.2% year-on-year (yoy) increase to RM13.27 billion, underpinned by growth in net interest income (NII) and non-interest income (NOII).

For the period, NII grew 5.0% YoY to RM9.31 billion from the 5.6% loan growth, while the 12.8% improvement in NOII to RM3.96 billion came largely on the back of improved capital

market activity.

On the other hand, CIMB’s net interest margin (NIM) slightly declined to 2.47% in 9M19 against 2.52% in 9M18, mainly from the spread compression in Malaysia and Thailand.

In regards to its prospects for the remainder of the year, CIMB stated that it will remain cautious due to the backdrop of uncertainty in the regional and global economic conditions.

The group revealed that it will continue to focus on operational efficiency and growth with the Forward23 strategic roadmap.

“CIMB Malaysia is expected to sustain its growth momentum in line with loan expansion and improving capital market activity. The outlook for CIMB Singapore will track regional economic directions, while CIMB Thai’s performance continues to progress in tandem with the ongoing transformation programme,” it said in its Bursa filing.

source https://www.thesundaily.my/business/cimb-s-q3-net-profit-contracts-144-from-higher-expenses-DA1640599