KUALA LUMPUR: CIMB Group Holdings Bhd posted a net profit of RM1.012 billion for 3QFY11 ended Sept 30, 10.5% higher than the RM916 million for the corresponding period last year.
“We posted another record quarter in net earnings in 3Q11, underpinned by the continued improvement at our Malaysian consumer banking operations and a rebound in Treasury and investments. We remain behind our full-year targets, but given the deteriorating environment and our cautious stance, we are pleased with these results,” Datuk Seri Nazir Razak, group chief executive of CIMB, said in a release.
The country’s second largest banking group by assets recorded an annualised net return on equity (ROE) of 16%.
Against the previous quarter, 3QFY11 revenue rose 2.5% to RM3.03 billion from RM2.96 billion, leading to a 4.3% increase in net profit to RM1.012 billion. For the cumulative nine months ended Sept 30, 2011, net profit rose 9.6% year-on-year (y-o-y) to RM2.898 billion on revenue of RM8.74 billion.
“The growth in net interest income was largely offset by lower non-interest income as last year’s non-interest revenues were boosted by sales of ex-Lippo Bank bonds. Excluding this, total revenues would have increased 4.4%. The group’s profit before tax was 8.5% higher at RM3.8 billion bolstered by much lower credit losses and low overhead cost increase,” CIMB said.
The group’s profit before tax (PBT) for 9MFY11 rose 8.5% y-o-y to RM3.8 billion from RM3.5 billion the year before.
The group’s Indonesian arm, CIMB Niaga, was the largest contributor to CIMB’s 9MFY11 PBT at 30% with RM1.15 billion. CIMB Thai’s RM61 million PBT was flat y-o-y.
The Malaysian consumer banking operations contributed 28% to group PBT in 9MFY11 against 17% in 9MFY10. Treasury and investments contributed 21%, corporate and investment banking (CIB) 17%, group asset management (GAM) and insurance 2%, while CIMB Thai’s contribution was 2%.
Total non-Malaysian PBT declined to 38% in 9MFY11 from 47% in 9MFY10 due to the absence of the ex-Lippo Bank bond gains at CIMB Niaga.
For 9MFY11, PBT at the group’s consumer banking increased by 79.3% y-o-y to RM1.06 billion due to the combination of a 9.5% improvement in revenue and lower credit charges. PBT at CIB was 9.9% lower y-o-y at RM657 million, while Treasury and investments declined 8.4% y-o-y to RM802 million.
The group’s total gross loans increased by 15.3% y-o-y supported by a 33.4% growth (in ringgit terms) at CIMB Niaga, as well as a 12.6% increase in Malaysian consumer loans. Mortgages grew by 16.1%, credit cards by 13.6% and the group’s micro credit by 81.4% y-o-y.
Hire purchase loans grew at a modest 1.1% y-o-y while commercial banking loans were unchanged. Corporate loans expanded 3.5% y-o-y. The group’s overall net interest margins eased to 3.12% from 3.39% last year.
The total loan impairment for the group declined by 55% y-o-y at RM198 million in 9MFY11 against RM440 million in 9MFY10. As a result, the group’s total annualised credit charge was 0.14% compared with the 0.40% full-year target.
The group’s gross impairment ratio continued to improve to 5.5% for 9MFY11 from 5.7% as at end-1HFY11 and 6.6% as at 9MFY10, with an impairment allowance coverage of 80%. The group’s cost to income ratio rose to 56.1% compared with 54.1% in 9MFY10.
CIMB Bank’s risk weighted capital ratio stood at 16.7% while its Tier-1 capital ratio stood at 14.5% as at Sept 30 (after the inclusion of 9MFY11 net profit).
CIMB’s Islamic division saw improved performances. Its PBT increased by 28.4% y-o-y to RM359 million. This was due to rising demand for syariah-compliant banking product.
Looking forward, Nazir remained optimistic.
“Although we may fall short of our ROE target of 17%, we should exceed consensus analysts’ forecasts for 2011,” he said. For 4Q, Nazir said that CIMB’s Treasury and mergers and acquisitions businesses “should do well”, while Malaysian consumer banking and CIMB Niaga will sustain the group’s current momentum.
“However, markets are volatile and regional economic indicators are softening, so we remain conservative on capital, liquidity and credit standards,” he said.
No dividends were declared for 3QFY11. Net assets per share was RM3.37 as at Sept 30 against RM3.13 a year ago.
This article appeared in The Edge Financial Daily, November 16, 2011.
“We posted another record quarter in net earnings in 3Q11, underpinned by the continued improvement at our Malaysian consumer banking operations and a rebound in Treasury and investments. We remain behind our full-year targets, but given the deteriorating environment and our cautious stance, we are pleased with these results,” Datuk Seri Nazir Razak, group chief executive of CIMB, said in a release.
The country’s second largest banking group by assets recorded an annualised net return on equity (ROE) of 16%.
Against the previous quarter, 3QFY11 revenue rose 2.5% to RM3.03 billion from RM2.96 billion, leading to a 4.3% increase in net profit to RM1.012 billion. For the cumulative nine months ended Sept 30, 2011, net profit rose 9.6% year-on-year (y-o-y) to RM2.898 billion on revenue of RM8.74 billion.
“The growth in net interest income was largely offset by lower non-interest income as last year’s non-interest revenues were boosted by sales of ex-Lippo Bank bonds. Excluding this, total revenues would have increased 4.4%. The group’s profit before tax was 8.5% higher at RM3.8 billion bolstered by much lower credit losses and low overhead cost increase,” CIMB said.
The group’s profit before tax (PBT) for 9MFY11 rose 8.5% y-o-y to RM3.8 billion from RM3.5 billion the year before.
The group’s Indonesian arm, CIMB Niaga, was the largest contributor to CIMB’s 9MFY11 PBT at 30% with RM1.15 billion. CIMB Thai’s RM61 million PBT was flat y-o-y.
The Malaysian consumer banking operations contributed 28% to group PBT in 9MFY11 against 17% in 9MFY10. Treasury and investments contributed 21%, corporate and investment banking (CIB) 17%, group asset management (GAM) and insurance 2%, while CIMB Thai’s contribution was 2%.
Total non-Malaysian PBT declined to 38% in 9MFY11 from 47% in 9MFY10 due to the absence of the ex-Lippo Bank bond gains at CIMB Niaga.
For 9MFY11, PBT at the group’s consumer banking increased by 79.3% y-o-y to RM1.06 billion due to the combination of a 9.5% improvement in revenue and lower credit charges. PBT at CIB was 9.9% lower y-o-y at RM657 million, while Treasury and investments declined 8.4% y-o-y to RM802 million.
The group’s total gross loans increased by 15.3% y-o-y supported by a 33.4% growth (in ringgit terms) at CIMB Niaga, as well as a 12.6% increase in Malaysian consumer loans. Mortgages grew by 16.1%, credit cards by 13.6% and the group’s micro credit by 81.4% y-o-y.
Hire purchase loans grew at a modest 1.1% y-o-y while commercial banking loans were unchanged. Corporate loans expanded 3.5% y-o-y. The group’s overall net interest margins eased to 3.12% from 3.39% last year.
The total loan impairment for the group declined by 55% y-o-y at RM198 million in 9MFY11 against RM440 million in 9MFY10. As a result, the group’s total annualised credit charge was 0.14% compared with the 0.40% full-year target.
The group’s gross impairment ratio continued to improve to 5.5% for 9MFY11 from 5.7% as at end-1HFY11 and 6.6% as at 9MFY10, with an impairment allowance coverage of 80%. The group’s cost to income ratio rose to 56.1% compared with 54.1% in 9MFY10.
CIMB Bank’s risk weighted capital ratio stood at 16.7% while its Tier-1 capital ratio stood at 14.5% as at Sept 30 (after the inclusion of 9MFY11 net profit).
CIMB’s Islamic division saw improved performances. Its PBT increased by 28.4% y-o-y to RM359 million. This was due to rising demand for syariah-compliant banking product.
Looking forward, Nazir remained optimistic.
“Although we may fall short of our ROE target of 17%, we should exceed consensus analysts’ forecasts for 2011,” he said. For 4Q, Nazir said that CIMB’s Treasury and mergers and acquisitions businesses “should do well”, while Malaysian consumer banking and CIMB Niaga will sustain the group’s current momentum.
“However, markets are volatile and regional economic indicators are softening, so we remain conservative on capital, liquidity and credit standards,” he said.
No dividends were declared for 3QFY11. Net assets per share was RM3.37 as at Sept 30 against RM3.13 a year ago.
This article appeared in The Edge Financial Daily, November 16, 2011.
