KUALA LUMPUR: CIMB Group Holdings Bhd posted a record net profit of RM4.47 billion for the nine months ended September 30 2018.
The 30.8 per cent higher year-on-year profit was bolstered by a RM928 million gain on the disposal of its 20 per cent stake in CIMB-Principal Asset Management and 10 per cent in CIMB-Principal Islamic Asset Management.
This in turn raised the group’s return on average equity (ROE) to 11.6 per cent in the nine months, and reduced its cost-to-income ratio (CIR) to 48 per cent.
The group’s net profit for the third quarter rose 4.2 per cent to RM1.18 billion from RM1.13 billion a year earlier, largely attributed to all segments except wholesale banking.
CIMB said on a business-as-usual (BAU) basis, its pre-tax profit stood at RM4.76 billion for the nine months, representing a four per cent year-on-year (Y-o-Y) growth.
“Lower Y-o-Y operating expenses of 6.4 per cent and loan loss provisions of 30.7 per cent contributed to the group’s increase in 9M18 BAU net profit by 3.6 per cent Y-o-Y to RM3.54 billion,” it noted.
This was achieved despite a 5.6 per cent Y-o-Y drop in operating income due to weaker capital markets in Malaysia.
“We are pleased to deliver a record pre-tax profit of RM5.69 billion despite the challenging operating landscape. The good performance was underpinned by lower provisions and costs, continued improvement from consumer and commercial banking, as well as a recovery in wholesale banking revenue in the third quarter,” said CIMB Group chief executive Tengku Datuk Seri Zafrul Aziz said in a statement.
On a quarter-on-quarter (Q-o-Q) basis, 3Q18 operating income was 5.2 per cent higher at RM4.14 billion from the better markets, leading to a 13.4 per cent increase in non-interest income.
Consumer banking’s pre-tax profit declined 2.1 per cent Q-o-Q from lower operating income and higher costs.
Commercial banking’s pre-tax profit was 1.7 per cent higher Q-o-Q due to improved operating income and lower provisions, while wholesale banking’s pre-tax profit was lower by 16.5 per cent Q-o-Q largely attributed to higher provisions, as operating income improved in the quarter.
“As 2018 draws to a close, we remain on track to meet our key T18 targets,” said Tengku Zafrul.
“However, we remain cautious amidst weaker regional economies and global trade tensions. Against this backdrop, we will continue to control asset quality and cost across all businesses and geographies, while we finalise our next mid-term plan to propel CIMB onto a stronger growth trajectory,” he added.