Tengku Datuk Zafrul Tengku Abdul Aziz
KUALA LUMPUR: CIMB Group
Bhd's earnings rose 10.6% to RM1.13bil in the third quarter ended Sept 30, 2017 from RM1.02bil a year ago boosted by higher interest income and net non-interest income.
The banking group announced on Tuesday its revenue increased by 7.2% to RM4.42bil from RM4.12bil. Earnings per share rose to 12.5 sen from 11.74 sen.
Tengku Datuk Seri Zafrul Aziz, the group chief executive of CIMB Group said: “We are continuing to show good progress across the group, recording our highest ever quarterly operating income of RM4.42 billion in 3Q17, and generating a 26.0% on-year growth in 9M17 net profit.
“The improved performance was underpinned by positive net interest margins, gradually declining provisions and healthier capital market activity.
“In particular, our consumer banking franchise in Malaysia and Thailand, as well as Investment and corporate banking activities contributed to the respectable results for the quarter,” Zafrul said.
CIMB said on a quarter-on-quarter (on-quarter) basis, the 3Q17 operating income was 2.2% higher at RM4.42bil, underpinned by the 13.6% growth in non-interest income and partially offset by a 2.2% decline in net interest income.
Consumer Banking preofit before tax (PBT) rose by 13.2% on-quarter mainly due to better performance in all countries.
However, regional commercial banking PBT fell by 69.2% on-quarter from lower revenue and increased provisions in 3Q17.
The banking group's wholesale Banking PBT increased by 18.8% on-quarter mainly due to the better capital markets in 3Q17, lower operating expenses and loan provisions.
Group asset management and investments' (GAMI) PBT was 86.5% lower on-quarter due to the absence of investment gains and higher impairment, while group funding PBT increased by 24.4% due to higher forex gains.
“The group’s 3Q17 net profit was 2.6% higher on-quarter at RM1.13bill owing to increased operating income and lower provisions,” it said.
For the nine months, its earnings rose a stronger 26% to RM3.41bil from RM2.71bil in the previous corresponding period. Revenue was up 11.5% to RM13.11bil from RM11.75bil.
CIMB Group reported a 24.6% increase in PBT of RM4.57bil for the first nine months of 2017 with loan provisions declining 0.3% on-year.
It said on a year-on-year basis, operating income expanded 11.6%. This was a 17.9% on-year improvement in pre-provision operating profit (PPOP)
The banking group's 9M17 operating income increased by 11.6% on-year to RM13.11bil largely driven by a 11.2% growth in non-interest income in line with better capital market activity and improved fee income.
The 9M17 net interest income rose 11.7%, underpinned by loans growth and improved net interest margin (NIM).
“Operating expenses was 6.3% higher on-yearbut only rose 2.9% after excluding foreign currency translation effects, with the group’s sustained cost management efforts.
CIMB's group’s regional consumer bank PBT recorded a 10.8% increase to RM1.92bil, of 42% of group PBT.
Revenue growth was underpinned by a strong non-interest income performance while operating costs were under control and normalising.
As for the regional commercial banking, it recorded a 14.2% decline on-year. The reasons was that the revenue expansion from strong non-interest income growth was offset by higher provisions.
CIMB's group regional wholesale banking PBT reported an increase of 64.6% on-year to RM1.85bil.
Driving the growth were increased capital market activity, loans growth and lower provisions.
Meanwhile, group asset management and investments's PBT fell 51% on-year without the equity accounting of the Bank of Yingkou, pending completion of its proposed sale.
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