Malaysia's CIMB profit up 40% but stays cautious on growth

[SINGAPORE] CIMB Group Holdings Bhd posted a 40 per cent jump in first-quarter profit on lower costs and provisions, but Malaysia's second-largest bank by assets maintained a cautious outlook for the year.

Net profit in the quarter ended March rose to 813.8 million ringgit (S$275.63 million) from 580.1 million ringgit in the year-ago period, the company said on Thursday. Net interest income rose nearly 9 per cent to 2.38 billion ringgit.

"We continue to be cautious on overall balance sheet growth, with a focus on cost management, asset quality, capital management and governance, given the slower regional economies and persistent market volatility," group chief executive Zafrul Aziz said in a statement.

Thailand and Singapore will see selective growth areas, coupled with close monitoring of asset quality, Mr Zafrul said, adding that he expects a slower growth environment at CIMB Malaysia for the rest of the year.

In a report on Thursday, Moody's Investors Service said Malaysian banks face several headwinds including lower oil prices, weak external demand, a weakening domestic currency and rising concerns on governance highlighted by the scandal surrounding state fund 1MDB, making their operating conditions challenging.

CIMB has expanded in Southeast Asia in the past decade but the region has suffered slowing economic growth and depreciating currencies this year.

REUTERS