Business

Wednesday November 11, 2009

CIMB posts record quarterly profit


CIMB profit jumps 62% to RM726.8mil in third quarter

PETALING JAYA: CIMB Group Holdings Bhd posted 62% growth in net profit to RM726.8mil for the third quarter ended Sept 30 against RM448mil in the previous corresponding period, on “a combination of good performances by most divisions and (an) enlarged platform in Indonesia.”

Revenue rose to RM2.8bil versus RM1.7bil a year ago.

For the first nine months, net profit improved to RM2bil from RM1.6bil a year ago while turnover increased almost 35% to RM7.9bil against RM5.9bil previously.

“This is our best operating nine months and single quarter results ever. The main disappointment this year has been our international (ex-Asean) banking portfolio which saw higher loan losses due to the effects of the global financial crisis,” said group chief executive officer Datuk Seri Nazir Razak in a statement.

The group’s Malaysian “good” consumer bank posted 8.5% year-on-year growth in profit before tax (PBT) on revenue growth of 9.5% for the first nine months but the overall Malaysian consumer bank’s PBT fell 21.6% year-on-year, dragged by lower recoveries at group special assets management arm that manages its bad loans.

As a result, the Malaysian consumer bank contributed 15% of the group’s total PBT in the first nine months, versus 23% a year ago. Treasury and investments remained as the largest earnings contributor, as the division’s PBT surged 44% to RM1.2bil.

Corporate and investment banking contribution to group PBT was lower at 16% from 28% previously, dragged down by comparatively slower capital markets and higher international portfolio provisioning.

CIMB Niaga’s contribution, meanwhile, made up 21% of group PBT compared with 13% a year ago. The Indonesian bank’s PBT surged 88.5% year-on-year to RM558mil in the first nine months, thanks to inclusion of the ex-Lippo franchise and favourable operating environment in Indonesia.

PBT from asset management and insurance grew exponentially to RM114mil from RM12mil a year ago as CIMB-Aviva’s contribution improved sharply. The division’s earnings constitute about 4% of total group while CIMB Thai contributes just under 1%.

Total non-Malaysian contribution to the group jumped to 26% in the first nine months from 18% in the previous corresponding period.

The group’s total gross loans expanded 28% year-on-year due to inclusion of the newly acquired ex-Bank Lippo in Indonesia and CIMB Thai.

Excluding these, its gross loans grew by 11.7%, fuelled by the Malaysian consumer and corporate loans, which grew 11.8% and 18.8% respectively.

Mortgages, credit cards and micro credit lending grew by 19.7%, 7.3% and 107.4% respectively while hire purchase grew a marginal 1.6% and business banking loans declined 5.3%. Islamic banking loans surged 177%, comprising 9% of total group loans.

The group’s loan loss provisions rose 54.0% to RM819mil for the nine months due to the inclusion of ex-Lippo, CIMB Thai as well as higher provisioning from its international portfolio.

Nevertheless, the total credit charge for the group stood at 0.57%, or lower than the 0.8% to 0.9% full year target.

Net non-performing loans ratio fell to 2.4% from 3% as of end September, reflecting a sustained improving trend in asset quality.

CIMB Investment Bank reaffirmed its position as the number one stockbroker in Malaysia and regained its top spot in primary bonds and the IPO segment.

It rose to the second spot on the merger and acquisition league table and is now third in equity capital market deals for the nine months.

“We are positive about our prospects in the fourth quarter and confident of achieving our revised 14% to 15% return on equity target for this year.

“There has been a surge in activity in the domestic equity and debt markets and the economic and operating environment has improved across the region,” Nazir said.


CIMB : [Stock Watch] [News]


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