CIMB reports robust operating income in FY19

KUALA LUMPUR: CIMB Group Holdings Bhd has maintained a cautious outlook for 2020 after the bank registered a robust operating income last year, underpinned by steady loan growth.

"CIMB Group reported a profit before tax of RM5.97bil for financial year 2019, translating to a net earnings per share of 47 sen," the bank said in a statement today.

Full year net profit was RM4.56bil.

The group declared a second interim net dividend of 12 sen per share to be paid via cash.

For FY19, the total dividend amounted to 26 sen per share.

“Our FY19 performance came in within our expectations amidst numerous macro challenges," group chief executive officer Tengku Datuk Sri Zafrul Aziz said.

"We are also pleased that our underlying operating income showed robust growth underpinned by respectable loan growth in Malaysia, Singapore and Thailand," he said.

CIMB's commercial banking business, Zafrul said, posted a strong performance, with profit before tax up 87%, driven partly by its double-digit business loan growth of 12.9% in Malaysia.

Operating income in FY19 grew 8.2% to RM17.8bil.

Net interest income expanded 6.3% to RM12.66bil from 6.7% loan growth.

Improved capital market activity last year boosted its non-interest income 12.9% to RM5.14bil.

Net interest margin was relatively flat at 2.46%, with some compression in Malaysia and Thailand.

Loan loss provisions rose 14.5% to RM1.64bil.

CIMB said there is potential for further interest rate cuts across the region in 2020, amid sustained global headwinds, trade tensions and the rising threat from the fast spreading coronovirus.

"Moving forward, we remain vigilant given the macroeconomic headwinds, coupled with uncertainties due to the Covid-19 virus," Zafrul said.

"However, we remain cautiously optimistic that in the second half of 2020, the Malaysian economy in particular, will improve from the recently announced stimulus package and other private sector initiatives,” he concluded.