KUALA LUMPUR: CIMB Group Holdings Bhd pre-tax profit reduced to RM4.27 billion for the financial year ended Dec 31, 2014 compared with RM5.84 billion in 2013.
Revenue also decreased to RM14.14 billion from RM14.67 billion previously.
Its Group Chief Executive, Datuk Tengku Zafrul Tengku Abdul Aziz said 2014 was a difficult year, resulting from declined performance due to slower revenues and a sharp increase in provisions for corporate banking loans in its Indonesian unit, CIMB Niaga as well as Malaysia.
"This was partially due to Rupiah depreciation at an average rate of 8.9 per cent year-on-year (Y-o-Y).
"Capital markets continued to be challenged by low volumes and volatility which affected the investment bank (IB) and treasury and markets operations," he told reporters at the group's 2014 financial year results announcement, here today.
However, Tengku Zafrul said the group's net profit for 2014 reached a record level of RM6.72 billion, lifted by a strong 11.5 per cent rise in net earnings in the 2014 fourth quarter.
CIMB's total gross loans (excluding the declining bad bank loan book) expanded 13.2 per cent to RM262 billion from RM231.4 billion last year.
Over the same period, total deposits grew 7.3 per cent Y-o-Y, to RM284.7 billion from RM265.4 billion, previously.
"We remain heartened by positive performances at the Malaysian consumer bank and CIMB Bank Singapore, while CIMB Thai is showing operational traction.
"We go into 2015 with a significantly strengthened capital position, allowing us to better handle the banking industry headwinds," he said.
Tengku Zafrul said the growth prospects for emerging markets are softer this year and the group is making 2015 a year of recalibration with the T18 initiatives providing a platform to make some difficult decisions to streamline operations, implement management and organisational changes to future proof CIMB.
Costs will be a primary focus and the group has started to streamline their operations and has align cost structures with market realities, said Tengku Zafrul.
In terms of growth prospects for CIMB Malaysia, he said it should track the slower economic environment and moderation in consumer spending.
He said CIMB Singapore is expected to perform positively with continued business expansion amidst steady economic growth, while the outlook for CIMB Thai suggests a gradual improvement in line with the expected economic recovery.
"Indonesia remains challenged by tight liquidity and slower asset growth although economic reforms are expected to gain traction from 2015 second half.
"The group's treasury and markets and IB businesses will have to maneuver difficult capital markets conditions given the volatile and unpredictable global markets," Tengku Zafrul added. -- BERNAMA