Tengku Datuk Seri Zafrul Aziz, Group CEO, CIMB Group said:
KUALA LUMPUR: CIMB Group
Holdings Bhd posted net earnings of RM5.58bil in the financial year ended Dec 31, 2018, a 24.77% increase over the previous year, aided by lower provisions and costs.
For FY18, the group benefited from a RM928mil gain from the Q2FY18 sale of 20% of CIMB-Principal Asset Management (CPAM) and 10% of CIMB-Principal Islamic Asset Management (CPIAM).
Business-as-usual net profit was up 4% y-o-y to RM4.66bil on 5.2% lower operating expenses and 35.8% lower loan loss provisions, it said in a stock exchange filing.
Pre-tax profit hit a record RM7.2bil in FY18; excluding the gain on disposals, pre-tax profit was RM6.27bil, up 2.7% y-o-y.
Revenue however slid 1.39% to RM17.38mil over the one-year period.
According to Tengku Datuk Seri Zafrul Aziz, group CEO of CIMB Group, the results were underpinned by strong performances from both consumer and commercial banking, as well as lower provisions and costs.
"Our ROE is higher at 11.4% whilst CET1 strengthened to 12.6% and loan loss charge improved to 0.41%," he said.
In an announcement to the stock exchange, the group declared a second interim dividend of 12 sen per share to be paid via cash or an optional dividend reinvestment scheme. This brings total dividend payout for FY18 to 25 sen per share.
On an operating level, income for the year slid 6.6% y-o-y to RM16.45mil due to a 16% decline in non-interest income from slower capital markets in Malaysia and a 2.5% decline in net interest income mainly from NIM compression in Indonesia.
This was partially offset by a RM163mil gain from the sale of a 50% stake in CIMB Securities International Pte Ltd (CSI) in 1H18.
CIMB's total gross loans excluding bad bank grew 7% y-o-y while total deposits were 6.3% higher.
The group's loan-to-deposit ratio was 91.2% as at Dec 31, 2018, versus 90.8% a year earlier.
The gross impairment ratio was 2.9% with an allowance coverage of 106.3%, while cost-to-income ratio increased to 52.6% compared with 51.8% in FY17 mainly due to lower operating income.
Net interest margin was lower at 2.5% due to the contraction at CIMB Niaga.
On a segmental basis, consumer banking pre-tax profit rose 15.2% y-o-y to RM2.96bil while the commercial banking division saw a 180.1% jump in pre-tax profit due to its regional business recalibration.
In wholesale banking, pre-tax profit dropped 31.7% to RM1.75bil due to the weaker capital markets and higher provisions.
Meanwhile group asset management and investments experienced a 16.7% fall in pre-tax profit due to the deconsolidation of CPAM and CPIAM despite better performances in the private market.
The group funding division also grew pre-tax profit by 30.1% owing to the RM163mil gain from the sale of 50% stake in CSI.
Outside of Malaysia, the Thailand arm contributed RM399mil or a 116.8% jump in pre-tax profit while the Singapore business recorded 23.7% higher pre-tax profit of RM438mil from savings on the deconsolidation of CSI.
Indonesia's CIMB Niaga showed a 1.6% decline in pre-tax profit to RM1.35 bil due to FX translation effects despite showing an improved performance.
Tengku Zafrul said the group remains cautious in 2019 in view of external headwinds that may have an impact on its markets.
"In addition, we are also watching elections and political developments in Indonesia and Thailand closely," he said, while adding that he expects Asean's growth rate to remain robust.
"As for the Group, CIMB is now in its transformative growth phase, and we are confident that our five-year strategic plan will place us on a sustainable growth path, with a focus on advancing the interests of not only our customers, but also society.”
Limited time offer:
Just RM5 per month.
