"Our Malaysia operations showed encouraging performance in difficult conditions," says Tengku Zafrul.
KUALA LUMPUR: CIMB Group
Holdings Bhd recorded an 8.4% year-on-year (y-o-y) growth in operating income for the nine months to Sept 30, with well contained operating expenses.
The financial services giant told Bursa Malaysia that earnings, however, fell 30.4% from a year earlier to RM2.024bil due mainly to higher corporate loan provisions at its Indonesian operations. Revenue, meanwhile, rose 8.4% to RM11.35bil.
Its regional consumer bank pre-tax profit increased by 17.4% y-o-y to RM1.33bil, making up 39% of the group's profit.
Increased y-o-y provisions led to an 11.9% y-o-y reduction in the group's business as usual (BAU) net profit, after excluding exceptional expenses from restructuring and its mutual separation scheme (MSS).
For the third quarter (Q3) ended Sept 30, CIMB’s earnings fell 9.7% to RM803.89mil although operating income was 8.8% higher at RM3.84bil on the back of a 10.8% increase in net interest income and a 4.1% growth in non interest income.
CIMB said that for Q3, the group’s BAU net profit of RM902mil was 2.9% higher compared to the preceding quarter.
“Our continued improvement in quarter-on-quarter performance, amidst the prevailing economic uncertainties and challenges, reaffirms our business recalibration and the group’s commitment towards managing cost,” said group chief executive Tengku Datuk Seri Zafrul Aziz.
“This is reflected in our 8.4% y-o-y operating income growth and containment of operating expenses over the period.
“In addition to the structural cost alignment initiatives of streamlining the ex-Asean investment banking operations and the MSS in Malaysia and Indonesia, we have also improved processes and increased automation to enhance efficiency.”
CIMB would continue to push the cost management agenda further, Tengku Zafrul said.
“In terms of business segments, we are pleased to see the group’s business strategies bearing results, with our consumer and commercial banking operations gaining good traction,” he added.
On the prospects for the year, Tengku Zafrul said 2015 was proving to be a challenging year for the financial services industry.
"Our Malaysia operations showed encouraging performance in difficult conditions, but we continue to be cognisant of moderating economic growth and a slowdown in consumer spending. In Singapore, despite industry tightening measures, we continue to sustain positive growth momentum on the back of our cost-efficient business platform.
"CIMB Niaga in Indonesia continues its growth momentum, and our key focus will be on asset quality. While prospects for our Thai operations are challenging in the prevailing economic environment, we remain committed in view of the long-term strategic prospects," he said.
He noted that the group embarked on its three-year Target 18 (T18) recalibration initiatives earlier this year and as a result, the group was well positioned to face the prevailing headwinds from a structural alignment and cost management perspective.
"While our growth strategy continues to be measured considering the environment of weaker regional economies and capital markets, we remain confident that our T18 strategy will continue to deliver the results we set out to achieve."
CIMB shares gained 4 sen to close at RM4.60 on Wednesday.
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