CIMB Group Holdings Berhad reported a Profit Before Tax of RM1.61 billion for the first quarter of 2017.
On a year-on-year (Y-oY) basis, the Group’s 1Q17 operating income expanded 17.1%, translating to a 30.0% Y-o-Y improvement in pre-provisioning operating profit (PPOP”) and a 45.0% Y-o-Y growth in Net Profit to RM1.18 billion.
The 1Q17 net earnings per share (EPS) stood at 13.3 sen, while the annualised 1Q17 net return on average equity (ROE) was 10.3%.
“We had a good start to 2017, recording our highest ever quarterly net profit of RM1.18 billion in 1Q17 in tandem with the gradually improving regional economic conditions and capital market activity. Our main business units are gaining traction, with cost management initiatives continuing to show progress and asset quality showing sustained improvement. Better capital and balance sheet management has brought about more focused growth, improved margins, a healthier CASA ratio and a strengthened capital position,” said Tengku Datuk Seri Zafrul Aziz, Group Chief Executive, CIMB Group.
CIMB Group 1Q17 Y-o-Y Results CIMB Group’s 1Q17 operating income grew 17.1% Y-o-Y to RM4.36 billion largely driven by a 32.3% growth in non-interest income in line with improved capital market activity.
The 1Q17 net interest income rose 11.5% from loans growth and improvement in Net Interest Margin (“NIM”), Operating expenses were 7.4% higher Y-o-Y but was only 3.9% higher after excluding foreign currency translation effects, as the Group’s cost management initiatives continue to show progress.
The positive JAW brought about the 30.0% improvement in the Group’s PPOP. The Group’s PBT was 43.7% higher at RM1.61 billion, with loan provisions declining 8.8% Y-o-Y. 2 The Group’s Regional Consumer Bank PBT was 0.5% higher Y-o-Y in 1Q17 at RM561 million, making up 35% of Group PBT.
While revenue growth was healthy and costs kept in check, the relatively flat PBT performance was attributed to higher provisions from the credit cards and auto finance business in Indonesia.
The Regional Commercial Banking business continues to expand but the 7.8% lower PBT was due to the higher Y-o-Y provisions in Thailand. The Group’s Regional Wholesale Banking PBT was 117.0% higher Y-o-Y at RM727 million from a combination of increased capital market activity and a stronger Corporate Banking performance with loans growth and lower provisions. Group Asset
“Our 1Q17 results are testament to the stronger foundations that we have built since we embarked on our T18 Strategy. The strong start to the year also provides the impetus for us to continue embedding the 5C’s – capital, cost, culture, customer experience and compliance – across all our T18 programmes. We will continue to keep a tight rein on cost, strive to enhance operating income whilst expecting improvement in asset quality.”
“Looking ahead, the Group is cautiously optimistic for the rest of 2017, with more stable economic conditions, increased regional activity, improved capital markets and declining provisions across our key geographies. The Group is currently on track to achieve its key financial targets for 2017,” said Tengku Zafrul.