CIMB Group Holdings Bhd group chief executive officer Novan Amirudin
KUALA LUMPUR: CIMB Group
Holdings Bhd is optimistic for the rest of the year but remains cautious about ongoing global economic challenges and market volatility.
“We are optimistic for the remainder of the year while being vigilant and responsive to industry trends such as the global economic headwinds and market volatility which continue to persist.
“Our Forward23+ strategic plan will complete by the end of this year, and we are currently devising our next strategic plan, which we will announce alongside our FY24 results, taking into considerations our endowments, customer needs, trends and competitive landscape,” group chief executive officer Novan Amirudin said in a statement.
He added that the group’s commitment to future-proofing its business includes placing sustainability at the forefront of its operations.
“We recently announced our 2030 climate targets for our oil and gas and real estate portfolios, in addition to the earlier announced targets for thermal coal mining, cement, palm oil and power, becoming the first Malaysian bank to complete its 2030 decarbonisation target setting in pursuit of our broader 2050 Net Zero commitments.”
In the second quarter ended June 30, CIMB’s net profit rose 10.6% to RM1.96bil, or earnings per share of 18.35 sen compared with RM1.77bil, or 16.63 sen in the year-ago quarter.
Revenue climbed 5.03% to RM5.6bil against RM5.3bil last year.
In the first half to June 30 (1H24), the bank posted a net profit of RM3.9bil, up 14% from RM3.4bil while revenue rose 8.7% to RM11.2bil versus RM10.3bil posted a year ago.
“1H24 reflects another positive performance for the group. Our achievement is underpinned by the trust of our customers, collaboration with our partners and continued strong execution of the strategies under our Forward23+ strategic plan, while remaining nimble and responsive to current trends,” Novan said.
He attributed the improved performance to strong operating income growth, disciplined cost controls, and enhanced asset quality, all supported by the group's diversified Asean portfolio that serves all client segments.
CIMB said the results translate to a strong improvement in annualised return on average equity (ROE) of 11.4%, as compared to 10.6% recorded in 1H23.
Accordingly, the group proposed an all-cash first interim dividend of 20.00 sen per share and a special dividend of 7.00 sen per share.
CIMB said the interim dividend is based on a payout ratio of 55.0%, based on 1H24 net profit, in line with the group’s dividend policy.
Its operating income in 1H24 was up 8.7% year-on-year (YoY) to RM11.23bil, with net interest income (NII) increasing by 6.7% to RM7.65bil underpinned by both net interest margin (NIM) and asset growth.
Price discipline and deposit-led strategies to address industry NIM compression in 2023 are starting to pay off, resulting in a second straight quarter of NIM expansion with 7bps in 1H24.
The bank said loan growth continued its momentum, rising 4.2% YoY from all markets and segments, whilst deposits grew by 2.7% YoY. Current account savings account (CASA) ratio recorded 40.9% as at June-24, up from 38.5% as at June-23.
Meanwhile, non-interest income (NOII) strengthened, improving 13.2% to RM3.58bil, while NOII ratio improved to 31.9%, up from 30.6% in 1H23 driven by stronger fees, treasury client sales and trading.
The group’s cost-to-income ratio (CIR) improved 40bps YoY to 45.6%, with operating expenses remaining under control, rising 7.9% YoY mainly due to increased investments in technology, rising 9.4% YoY.
The group’s pre-provisioning operating profit strengthened to RM6.11bil, up 9.4% from the positive JAWS. Asset quality improved with total provisions remaining contained with an 8.9% decline YoY to RM802mil and allowance coverage improving to 101.2%.
Its capital position remains strong and above target with its common equity tier 1 (CET1) at 14.5% as at June-24. Total capital ratio stood at 18.2% as at June-24.
The liquidity coverage ratio (LCR) remains comfortably above the regulatory requirement of 100% for all banking entities within the group.
