Malaysia's CIMB posts best quarterly profit in 5 years

Kuala Lumpur

CIMB Group Holdings Bhd, Malaysia's No 2 lender by assets, turned in its highest quarterly profit in five years, boosted by lower cost and provisions as well as a one-off gain from a stake disposal in its brokerage business.

CIMB's results, coming on the heels of a promising quarter from Malayan Banking Bhd (Maybank), will likely help ease investor worries that a slow down in economic growth at home will dent banks' profits.

CIMB reported RM1.31 billion (S$440 million) in net profit for the three months ended March, versus RM1.18 billion a year ago. This was the highest since the first quarter of 2013 and ahead of an average estimate of RM981 million from four analysts surveyed by Thomson Reuters.

Results were underpinned by a one-off gain of RM152 million from selling part of the bank's 50 per cent stake in its international brokerage business to China Galaxy Securities.

CIMB is expected to record several one-off disposal and revaluation gains for the year - including from paring down stakes in two asset management joint venture units to US-based partner Principal Financial Group for RM470.3 million and RM637 million in marked-to-market revaluation gains on its existing 40 per cent stake in CIMB Principal Asset Management.

These gains could help the group kick off restructuring initiatives to enhance productivity and reduce overall operating costs, such as digitalisation and headcount rationalisation efforts, analysts said. Bigger rival Maybank also reported strong first-quarter results on Monday, charting a 10 per cent increase in net profit on lower expenses and impairment losses.

Malaysia's top two banks expect stronger demand for corporate and consumer loans in the South-east Asian region, driven by improving economies, to support their overall loans growth in 2018. REUTERS