CIMB posts RM580m profit, Indonesian ops weaker results

An interview with Maybank Investment CEO Tengku Zafrul.

PETALING JAYA: CIMB Group Holdings Bhd made a net profit of RM580.12mil in the first quarter ended March 31, after excluding RM202mil of restructuring expenses, while its Indonesian operations reported a weaker set of results.

This compared with a net profit of RM1.07bil in the corresponding period a year earlier.

It said after excluding the exceptional expenses, the group’s business as usual (BAU) net profit fell 26.6% year-on-year. The group’s annualised first-quarter BAU net return on average equity was 8.2%.

During the quarter in review, CIMB group revenue increased 4% to RM3.68bil from RM3.54bil a year ago, while its earnings per share were at 6.89 sen compared with 13.15 sen previously.

“We have started 2015 on a better note after a difficult end to 2014. Our core banking operations are performing well, especially the consumer and commercial banking segments,” CIMB group chief executive Tengku Datuk Zafrul Tengku Abdul Aziz said in a statement.

He added: “Despite the continued challenging environment, we are pleased with the 4% year-on-year growth in operating income and much improved on-quarter profitability.”

Based on the BAU numbers, CIMB said its first-quarter operating income rose 4% to RM3.68bil, underpinned by a 4.7% expansion in net interest income and a 2.5% growth in non-interest income, while operating expenses rose 6.3% due to increased personnel expenses.

However, the group’s profit before tax (PBT) fell 28.3% to RM1.03bil due to higher corporate loan provisions from Indonesia.

CIMB said its regional consumer bank PBT rose 11.2% on-year in the first-quarter to RM437mil and accounted for 43% of group PBT.

“Contributions were stronger from all geographies, with a larger jump from the Indonesian consumer operations as well as lower operational losses from Thailand,” it said.

Regional commercial banking PBT was up 18.1% year-on-year at RM196mil due to solid asset growth.

The group’s regional wholesale banking PBT fell 56.6% to RM293mil due to higher corporate banking provisions and softer treasury and markets, while the investment banking operations improved from increased market activity after excluding the one-off restructuring costs.

“Non-Malaysian PBT contribution to the group was lower at 20% in the quarter in review compared with 38% previously, principally due to the 89.4% decline in Indonesia’s PBT to RM45mil from lower PT CIMB Niaga Tbk earnings,” it said.

However, Thailand’s PBT contribution to the group fell 23.9% to RM54mil, following increased corporate banking provisions in the first quarter.

Total PBT contribution from Singapore expanded by 46.1% to RM109mil, as both the bank and securities operations performed better.

“The group’s total gross loans (excluding the declining bad bank loan book) expanded 12.8% year-on-year. Over the same period, total deposits grew by a similar 12.8% . The group’s loan-to-deposit ratio was slightly lower at 90.3% compared with 90.7% previously,” it said.