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Malaysia's CIMB posts highest net interest income in seven quarters
[KUALA LUMPUR] CIMB Group Holdings Bhd, Malaysia's second-biggest bank by assets, on Wednesday posted its highest quarterly net interest income in seven quarters but said slowing Southeast Asian economies could curb future growth.
CIMB, the region's fifth-largest lender by assets, reported net interest income of 2.42 billion ringgit (S$808 million) for the third quarter through September - its highest since December 2013 - driven by growth in operating income.
CIMB, chaired by Nazir Razak, brother of Prime Minister Najib Razak, spent the past decade expanding in Southeast Asia but the region has suffered slowing economic growth and depreciating currencies this year.
To mitigate any impact, the bank embarked on a cost-cutting campaign in July which resulted in the loss of 3,599 workers, or 11 per cent of employees across Malaysia and Indonesia. "2015 is proving to be a challenging year for the financial services industry," Chief Executive Officer Tengku Zafrul Aziz said in a statement. "Our Malaysia operations showed encouraging performance in difficult conditions, but we continue to be cognisant of moderating economic growth and a slowdown in consumer spending." The bank reported a 9.7 per cent decline in July-September net profit at 803.9 million ringgit, mainly dragged by a higher allowance made for impairment losses on loans, advances and financing. Revenue rose 8.8 per cent to 3.84 billion ringgit.
Shares of CIMB closed 0.88 per cent higher at 4.60 ringgit ahead of the earnings release, versus a 0.44 per cent rise in the benchmark index. The counter has lost 18 per cent over the past year versus the benchmark's 4.8 per cent decline.
Larger rival Malayan Banking Bhd is scheduled to report July-September earnings on Thursday.