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| Tengku Datuk Seri Zafrul Aziz: “We feel cautiously optimistic for the second half of 2017, given the strong GDP growth for Malaysia and Indonesia, and the expected gradual improvement in Singapore and Thailand, all of which signal increased regional activity and improved capital markets. |
KUALA LUMPUR: CIMB Group Holdings Bhd's earnings crossed the RM1bil mark in the second quarter ended June 30, 2017 on the back on firmer revenue and it declared a higher interim dividend of 13 sen or a payout of RM1.18bil.
The banking group announched on Monday that its earming rose 26.3% to RM1.10bil from RM872.82mil a year ago. Its revenue increased by 10.8% to RM4.33bil from RM3.90bil Earnings per share (EPS) were 12.25 sen.
In the first half, its earnings jumped 35.3% to RM2.28bil from RM872.83mil in the previous corresponding period. Revenue rose 13.8% to RM8.68bil from RM7.63bil.
CIMB said profit before tax for H1 was RM3.05bil. On a year-on-year (on-year) basis, the group's 1H17 operating income expanded 13.9%.
This was a 21.4% on-year improvement in pre-provisioning operating profit and a 35.3% on-year growth in net profit to RM2.28bil.
“The 1H17 net earnings per share stood at 25.6 sen, while the annualised 1H17 net return on average equity (ROE) was 9.9%.
The group declared a first interim net dividend of 13 sen per share.
“The total interim dividend amounted to a payment of approximately RM1.18bil, translating to a dividend payout ratio of 51.6% of 1H17 profits.
“We are pleased with our first half year 2017 results, particularly the 35.3% on-year net profit increase, a lower cost-to-Income ratio of 52.5% and strengthened CET1 ratio of 11.9%,” it said.
Group chief executive of CIMB Tengku Datuk Seri Zafrul Aziz said the H1 performance was driven by loans growth across segments, improvements in net interest margin and better-performing capital markets.
“We are also seeing good topline growth in consumer banking in Malaysia and Thailand, and in our regional commercial and corporate banking businesses.
“Our results in recent quarters is testament to the group's continuous focus on building sustainable growth, maintaining margins, managing cost and optimising capital,” he said.
Tengku Zafrul felt cautiously optimistic for the second half of 2017, given the strong GDP growth for Malaysia and Indonesia, and the expected gradual improvement in Singapore and Thailand, all of which signal increased regional activity and improved capital markets.
“Even as we grow in our key markets, we will continue to focus on asset quality across all businesses. We are also confident that with the continued embedment of the 5C‟s – capital, cost, culture, customer experience and compliance – across all our T18 programmes, CIMB is on track to meet its key financial targets for 2017,” he said.
CIMB Group's 1H17 operating income grew 13.9% on-year to RM8.69bil largely driven by a 15.9% growth in non-interest income in line with better capital market activity.
Its 1H17 net interest income rose 13.1% from loans growth and improved Net Interest Margin (NIM). Operating expenses rose 7.8% on-year but was only 4.0% higher after excluding foreign currency translation effects, as the group's cost management efforts sustain.
The positive JAW brought about the 21.4% improvement in the group's PPOP. The group's PBT was 31.8% higher at RM3.05bil, with loan provisions staying relatively flat at 0.3% on-year.
(The jaws ratio is a measure used in finance to demonstrate the extent to which a trading entity's income growth rate exceeds its expenses growth rate, measured as a percentage.)
The group's regional consumer bank PBT was 0.4% lower on-year in 1H17 at RM1.20bil, making up 39% of group PBT.
“While revenue growth was steady and operating costs under control, the relatively flat PBT was attributed to provision writebacks in 1H16 and higher provisions from seasonal festive effects at the end of 2Q17,” he said.
CIMB's regional commercial banking PBT improved by 2.9% on-year as the revenue expansion from strong non-interest income growth was partially offset by higher provisions.
It regional wholesale banking PBT improved 76.9% on-year to RM1.24bil from a combination of increased capital market activity, stronger loans growth and lower provisions.
CIMB said on a quarter-on-quarter basis, 2Q17 operating income slipped 0.8% at RM4.33bil, as the 2.4% growth in net interest income was offset by the 8.1% decline in non-interest income.
Consumer banking PBT was 13.2% higher on-quarter largely due a better performance in Indonesia and Thailand.
Regional commercial banking's PBT declined by 26.8% on-quarter from lower revenue and increased provisions in 2Q17.
Wholesale banking PBT declined by 29.7% on-quarter mainly due to the weaker capital markets and absence of provision writebacks in 2Q17. The group's 2Q17 net profit was 6.5% lower on-quarte at RM1.10bil predominantly due to lower income and higher loan loss provisions.
CIMB Islamic’s 1H17 on-year PBT increased by 0.8% to RM371mil driven by the strong 12.6% operating income growth which was partially offset by increased impairments due to provision writebacks in 1H16.
CIMB Islamic’s gross financing assets increased by 19.7% on-year to RM51.1bil, accounting for 15.9% of total group loans. Total deposits increased by 23.4% on-year to RM57.4bil.
http://www.thestar.com.my/business/business-news/2017/08/28/cimb-group-q2-earnings-up-more-than-26pct-to-rm1pt1b/
