Malaysia's CIMB logs 5.4% bump in Q4 profit on commercial banking boost

[KUALA LUMPUR] Malaysian lender CIMB Group Holdings Bhd posted a 5.4 per cent rise in fourth-quarter net profit on Thursday, charting three years of consecutive quarterly profit increases, largely lifted by its commercial banking and group funding businesses.

The lender, Malaysia's second-largest by assets after Malayan Banking Bhd, also achieved record quarterly profit in the first half of 2018.

CIMB's net profit for the three months ended December was 1.12 billion ringgit (S$371.1 million), compared with 1.06 billion ringgit a year prior. The performance surpassed the 973 million ringgit average of three analyst estimates compiled by Refinitiv.

Revenue was 9.8 per cent lower at 4.07 billion ringgit.

Its commercial banking business swung to a profit of 190 million ringgit, helped by a reduction in provisions.

The group funding segment saw profit grow 63.9 per cent to 272 million ringgit.

Net interest income fell 3.7 percent to 2.43 billion ringgit.

The wholesale banking segment saw profit drop 32.7 per cent while the asset management and investment business swung to a loss during the quarter.

The bank expects loan growth for this year to be around 6 per cent, and is optimistic about operations in Malaysia and Indonesia.

"Overall we are forecasting our loan growth for the whole group to be around 6 per cent, driven mainly by Malaysia and Indonesia that we expect to grow around 6-7 per cent," Group Chief Executive Zafrul Aziz said at a results briefing.

Net interest margin (NIM) - a measure of bank profitability - saw a 13 basis point compression to 2.5 per cent in 2018. For 2019, CIMB expects NIM to be relatively stable with a 5-10 basis point contraction.

While CIMB expects growth in the region to be robust this year, Mr Zafrul said the bank remains cautious for 2019 in view of sustained external headwind, with elections and political developments in Indonesia and Thailand closely watched.



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