CIMB quarterly performance shows improvement

CIMB Group Holdings Bhd group CEO Datuk Abdul Rahman Ahmad.

PETALING JAYA: CIMB Group Holdings Bhd has highlighted concerns about the operating environment, but says its key operating markets are resilient and it is well-positioned to capture economic growth, especially from the positive impact of increased tourism activities.

“Barring unforeseen circumstances, the group is optimistic of being on track to deliver on its financial year 2024 targets on the back of positive performance from Malaysia and Singapore,” group chief executive officer Datuk Abdul Rahman Ahmad said in a statement.

For the first quarter ended March 31 (1Q24), CIMB’s net profit rose 17.7% year-on-year (y-o-y) to RM1.96bil or an earnings per share (EPS) of 18.16 sen, as revenue rose 12.6% y-o-y to RM5.63bil driven by growth in net interest income (NII) and non-interest income (NOII).

The banking group said the higher profit was driven by strong operating income growth and contained costs and provisions.

The positive performance translates to an improvement in the group’s annualised return on average equity to 11.4% in 1Q24 as compared to the 10.3% recorded in 1Q23.

NII grew 7.7% on-year to RM3.79bil due to robust loan growth and net interest margin (NIM) recovery in the banking book, while NOII grew 24.5% y-o-y to RM1.84bil supported by strong capital markets and investment-related income, as well as gains from the sale of non-performing loans.

Total gross loans increased by 7% to RM442.3bil in the period while total deposits grew by 8.2% y-o-y to RM505.9bil.

CIMB said deposits increased by 8.2% y-o-y, driven by the strong 16.8% growth in current account and savings account (Casa), which translates to an improved Casa ratio of 40.8% at end of March 2024 versus 37.9% in March 2023.

The group’s cost-to-income ratio improved to 45.3% attributed to the robust operating income expansion which offset the 8.9% increase in operating expenses in the period.