KUALA LUMPUR: CIMB Group Holdings Bhd's net profit fell 73.9 per cent to RM1.19 billion in the year ended December 31, 2020 (FY20) from RM4.56 billion in 2019.
Group revenue decreased 3.4 per cent to RM17.19 billion in FY20 from RM17.80 billion in FY19, CIMB said.
The group said the performance was largely affected by the Covid-19 pandemic,
This resulted in elevated loan provisions arising from accounting adjustments incorporating macroeconomic factors and management overlays, as well as specific provisions made against Covid-19 related and legacy accounts.
Against the backdrop, CIMB said net-interest income (NII) ha dgrown marginally to RM12.73 billion year-on-year (YoY) despite a 14 basis points (bps) decrease in net interest margin (NIM) to 2.32 per cent in FY20 due to the impact of lower interest rates and modification loss.
As for non-interest income (NOII), stronger treasury and markets, wealth management, and investment banking activity in the second half of the year partially offset weakness in the first half, resulting in NOII of RM4.46 billion.
CIMB said FY20 pre-provisioning operating profit (PPOP) had declined marginally by one per cent to RM8.21 billion, while operating income remained stable with a slight decrease of 3.4 per cent to RM17.19 billion.
It said aggressive cost reduction targets were also exceeded with a 5.5 per cent or RM524 million decrease in operating expenses leading to an improved cost-to-income ratio (CIR) of 52.2 per cent, down 1.2 per cent YoY.
"Topline resilience, cost discipline and proactive measures to protect asset quality enabled the group to strengthen its financial position and ensure it remains well-capitalised against shocks, leading to its highest CET1 ratio of 13.3 per cent.
"CASA also grew strongly by 22.6 per cent in FY20, bringing the CASA ratio to 41.3 per cent as at December 2020 from 34.4 per cent in the previous year," it said.
For the fourth quarter, the group's net profit fell 74.7 per cent to RM214.98 million from RM848.64 million, while revenue grew 5.6 per cent to RM4.72 billion compared to RM4.52 billion last year.
This was underpinned by a 3.8 per cent increase in NII and 10.3 per cent NOII growth, it said.
The group proposed an annual dividend of 4.81 sen per share, amounting to a total payout of RM477 million or a payout ratio of 40 per cent.
Group chief executive officer Datuk Abdul Rahman Ahmad said the group would maintain a "cautious growth stance" in 2021.
"We anticipate that economic recovery will continue to be uneven with downside risks in the short term before improving in the second half of the year.
"Enhanced risk management, prudent cost optimisation and targeted investments across the business will remain priorities as we seek to drive efficient growth. With expected lower provisions, we anticipate considerably better financial performance in FY21," he added.