CIMB Group CEO Datuk Abdul Rahman Ahmad
KUALA LUMPUR: CIMB Group
Holdings Bhd remains vigilant about global economic uncertainties, including geopolitical tensions and China's potential slowdown, along with ongoing deposit competition in 2024.
“Our priority remains on completing our Forward23+ strategic plan and delivering on key focus areas, such as affluent and wealth management, strengthening our current account savings account (CASA) and deposit franchise, as well as implementing effective balance sheet management to improve net income margin (NIM) regionally,” group chief executive officer Datuk Abdul Rahman Ahmad said in a statement.
“Investments into technology and operations to strengthen resiliency and digital platform reliability where we invested close to RM3.44bil in capital expenditure over the last four years have borne meaningful impact as our digital platforms’ availabilities have remained above target and delivered strong growth in digital transactions and revenue,” he said, adding that the bank’s focus now shifts towards accelerating its digital initiatives.
In the fourth quarter ended Dec 31, CIMB net profit rose 29.4% to RM1.7bil compared with RM1.32bil in the same quarter in the previous year on stronger performance in core markets and lower provisioning.
Revenue for the period rose to RM5.37bil against RM5.2bil last year while earnings per share climbed to 16.09 sen from 12.49 sen previously.
For the full year, CIMB posted a net profit of RM6.98bil, up 28.3% from RM5.4bil while revenue grew 6% to RM21bil from RM19.8bil last year.
CIMB has proposed an all-cash second interim dividend of 18.50 sen per share, bringing the total proposed annual dividend to 36.00 sen per share for a payout ratio of 55.0%, in line with its dividend policy.
In addition, the bank is also proposing a special dividend payout of RM747mil or 7.00 sen per share, translating to a record total dividend payout of RM4.59bil for FY23, providing shareholders with higher returns.
The bank said its FY23 performance was underpinned by robust operating income growth with solid loan and CASA growth from all core markets, coupled with lower provisions from prudent risk management and recoveries.
FY23 operating income rose 5.9% year-on-year (YoY) to RM21.01bil, driven by non-interest income (NOII), which grew strongly by 36.5% to RM6.39bil from investment and market-related income.
This offset the challenging net income margin (NIM) environment caused by the continued elevated cost of deposits with net interest income (NII) dipping 3.5% to RM14.63bil.
Its total gross loan growth momentum continued, rising 8.3% YoY driven by stronger demand across targeted key markets and segments, whilst total deposits grew by 8.1% YoY.
In addition, total CASA expanded strongly by 11.5% YoY, leading to a CASA ratio of 41.2% as at Dec-23.
Cost-to-income ratio (CIR) was marginally higher YoY at 46.9%, with FY23 operating expenses rising by 6.9% YoY from cost inflation and technology investments. This led to the group’s pre-provisioning operating profit (PPOP) growing 5.1% to RM11.15bil.
CIMB continues to be well capitalised as its common equity tier 1 (CET1) ratio remained strong at 14.5% as at Dec-23.
“We are extremely pleased with the FY23 financial performance especially given the challenging industry NIM environment caused by the higher cost of deposits across key markets. This is attributable to the positive impact from the successful execution of our Forward23+ strategic plan particularly in enhancing our CASA franchise and driving our asset quality improvements sustainably.
“Our diversified Asean portfolio continues to be key, which has helped us deliver growth, while mitigating downside risks in weaker markets,” Abdul Rahman said.
