CIMB Group 1H17 net profit up 35.3% to RM2.28b

Tengku Dato' Sri Zafrul Aziz, Group Chief Executive, CIMB Group
Tengku Dato' Sri Zafrul Aziz, Group Chief Executive, CIMB Group

Highlights:

  • 35.3% Y-o-Y growth in 1H17 net profit to RM2.28 billion with annualised ROE of 9.9%
  • 1H17 PBT improved 31.8% Y-o-Y to RM3.05 billion on the back of operating income growing at a higher rate than cost
  • Cost-to-Income ratio improved to 52.5% for 1H17 (cf. 55.4% in 1H16) with continuous cost management discipline
  • CASA ratio at 35.6% with sustained deposit initiatives. CASA growth at 10.5% Y-o-Y
  • Strengthened Group CET1 ratio to 11.9% as of 30 June 2017
  • First interim dividend of 13.00 sen or 51.6% payout ratio declared for 1H17
  • CIMB Group has reported a Profit Before Tax (PBT) of RM3.05 billion for the first half of 2017 (1H17). On a year-on-year (Y-o-Y) basis, the Group’s 1H17 operating income expanded 13.9%, translating to a 21.4% Y-o-Y improvement in pre-provisioning operating profit (PPOP) and a 35.3% Y-o-Y growth in Net Profit to RM2.28 billion.

The 1H17 net earnings per share (EPS) stood at 25.6 sen, while the annualised 1H17 net return on average equity (ROE) was 9.9%. The Group declared a first interim net dividend of 13.00 sen per share to be paid via cash or an optional Dividend Reinvestment Scheme (DRS). The total interim dividend amounted to a payment of approximately RM1.18 billion, translating to a dividend payout ratio of 51.6% of 1H17 profits.


“We are pleased with our first half year 2017 results, particularly the 35.3% Y-o-Y net profit increase, a lower Cost-to-Income ratio of 52.5% and strengthened CET1 ratio of 11.9%. Our performance was driven by loans growth across segments, improvements in net interest margin and better-performing capital markets. We are also seeing good topline growth in Consumer banking in Malaysia and Thailand, and in our regional Commercial and Corporate Banking businesses. Our results in recent quarters is testament to the Group’s continuous focus on building sustainable growth, maintaining margins, managing cost and optimising capital,” said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive, CIMB Group.

The group’s 1H17 operating income grew 13.9% Y-o-Y to RM8.69 billion largely driven by a 15.9% growth in non-interest income in line with better capital market activity. 1H17 net interest income rose 13.1% from loans growth and improved Net Interest Margin (NIM). Operating expenses rose 7.8% Y-o-Y but was only 4.0% higher after excluding foreign currency translation effects, as the group’s cost management efforts sustain. The positive JAW brought about the 21.4% improvement in the group’s PPOP. The Group’s PBT was 31.8% higher at RM3.05 billion, with loan provisions staying relatively flat at 0.3% Y-o-Y.

The group’s Regional Consumer Bank PBT was 0.4% lower Y-o-Y in 1H17 at RM1.20 billion, making up 39% of Group PBT. While revenue growth was steady and operating costs under control, the relatively flat PBT was attributed to provision writebacks in 1H16 and higher provisions from seasonal festive effects at the end of 2Q17.

The Regional Commercial Banking PBT improved by 2.9% Y-o-Y as the revenue expansion from strong non-interest income growth was partially offset by higher provisions. The Group‟s Regional Wholesale Banking PBT improved 76.9% Y-o-Y to RM1.24 billion from a combination of increased capital market activity, stronger loans growth and lower provisions.

Group Asset Management and Investments  PBT was 35.8% lower Y-o-Y without the equity accounting of the Bank of Yingkou, pending completion of its proposed sale. Group Funding PBT was 697.1% higher Y-o-Y from lower funding costs and FX translation gains.