CEO Morning Brief

CIMB 3Q Net Profit Rises 31% to RM1.85 Bil on Strong Non-interest Income Improvement

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Publish date: Fri, 01 Dec 2023, 08:49 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Nov 30): CIMB Group Holdings Bhd’s net profit rose 31.3% to RM1.85 billion for the third quarter ended Sep 30, 2023 (3QFY2023) from RM1.41 billion a year earlier.

The growth was attributed to strong non-interest income (NOII) improvement, partially offset by weaker net interest income (NII) due to net interest margin (NIM) compression from higher cost of deposits.

Quarterly revenue rose marginally by 6.2% to RM5.31 billion from RM4.99 billion last year, the banking group's filing on the local bourse showed on Thursday.

Earnings per share for the quarter stood at 17.32 sen compared with 13.43 sen previously. The banking group did not declare any dividend for this quarter.

For the nine-month period ended Sept 30, 2023 (9MFY2023), CIMB's net profit climbed 27.9% to RM5.27 billion from RM4.11 billion in the previous year's corresponding period, as revenue grew 6.9% to RM15.64 billion from RM14.62 billion.

"The positive performance was driven by sustained operating income growth and lower provisions as the group continues to benefit from its diversified Asean portfolio," CIMB said of its financial performance for the period.

CIMB’s total gross loans growth momentum continued, rising 6.4% year-on-year (y-o-y) to RM431.8 billion underpinned by strong demand across markets and segments, while total deposits grew 8.6% y-o-y to RM490.3 billion despite persistent competition for deposits in all markets.

The banking group registered a loan-to-deposit ratio of 88.1% as at Sept 2023 compared with 87.8% in the preceding quarter.

Total current account saving account (CASA) balances expanded by 2.1% y-o-y, bringing about a CASA ratio of 39.2% as at Sept 2023.

In a separate statement, CIMB group chief executive officer Datuk Abdul Rahman Ahmad said positive growth was also seen in consumer and commercial banking in Malaysia, CIMB Digital Assets, and across the group's key markets of Indonesia and Singapore.

"Notwithstanding the positive performance, we continue to remain cautious given heightened global political risks, coupled with continued elevated interest environment which is likely to lead to a deceleration of global economic growth.

"As we approach the final year of the Forward23+ strategic plan, we remain focused on enhancing our CASA and deposit franchise, and growing in our targeted segments whilst continuing to keep a close watch on cost and asset quality," he said.

Abdul Rahman further said that the affluent and wealth management business is among the banking group's focus segments, with particular emphasis on transaction banking and the regional Asean network business.

"We will continue to leverage the growing interest and demand among clients for sustainable and Islamic finance solutions, areas in which CIMB has built a strong track record having pioneered various landmark transactions and innovative offerings over the past few years," he added.

Shares of CIMB were up one sen or 0.18% to close at RM5.65 apiece on Thursday, for a market capitalisation of RM60.26 billion.

Source: TheEdge - 1 Dec 2023

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