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Malaysia's CIMB expects Indonesian operations to improve from Q2

[KUALA LUMPUR] CIMB Group Holdings Bhd, Malaysia's second largest bank by assets, expects profit from its Indonesian operations to improve from the second quarter on lower loss provisioning, Chairman Nazir Razak said. "The performance in terms of bottom line in Indonesia will be better in the second quarter," Mr Nazir told reporters after the company's annual general meeting here on Tuesday.

He expects significant improvement in performance from the second half of 2015.

CIMB's Indonesian unit, Bank CIMB Niaga Tbk PT, chose to take a higher proportion of the provisions in the first quarter, meaning second-quarter provisions will be smaller, Najir said.

CIMB Niaga's net profit dropped to 82.72 billion rupiah (US$8.46 million) in the first quarter from 1.1 trillion rupiah a year earlier due to higher operating expenses and provisions.

CIMB, Southeast Asia's fifth biggest bank by assets, also said it plans to raise US$313 million via a 30-year zero-coupon bond in May, according to a regulatory filing on Malaysia's central bank website.

The bond is callable in five years and is the third issuance under an existing US$5 billion bond programme. It would be listed on the Taipei Exchange and the Malaysian bourse, the bank said in a statement.

KGI Securities Co Ltd and Taipei Fubon Commercial Bank Co Ltd will be the joint lead managers for the bond.

CIMB also plans to establish a new 6 billion ringgit (S$2.24 billion) conventional and Islamic bond programme, according to a separate regulatory filing by credit rating agency RAM Ratings. A CIMB official confirmed the details.


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