KUALA LUMPUR (Nov 28): CIMB Group Holdings Bhd (KL:CIMB), Malaysia’s second-largest bank by assets, said its net profit for the third quarter rose nearly 10% from a year earlier, thanks to growth in both net interest income (NII) and non-interest income (NOII).

Net profit for the three months ended Sept 30, 2024 (3QFY2024) was RM2.03 billion, the company said in an exchange filing. Year-on-year, net interest income edged up 1.8%, while net fees and commission income grew 9.2%, and other non-interest income surged 28%.

“The group is confident of capturing the positive tailwinds for an improved financial performance and achieving its [return-on-equity (ROE)] target for 2024,” CIMB said.

No dividend was declared for the quarter.

For the first nine months, the company recorded an increase in net profit of 12.56% year-on-year (y-o-y) to RM 5.93 billion, while its net income was RM16.97 billion, an 8.52% rise compared to the same period last year.

According to CIMB, this was mainly due to improvements in NII which grew 6% y-o-y driven by asset growth while NOII stood at RM5.39 billion, a 14.4% rise, lifted by stronger fees, treasury client sales and trading income.

Meanwhile, its banking book net interest margin saw three consecutive quarters of expansion to 2.75% in 3QFY2024, driven by price discipline and deposit led strategies.

Total gross loans growth also came in steady at 4.3% y-o-y, and according to CIMB, underpinned by strong demand across markets, whilst deposits increased marginally y-o-y.

Cost-to-income ratio improved 40 basis points (bps) y-o-y to 45.9%, as the group kept operating expenses under control.

Asset quality also improved, said CIMB, as gross impaired loans (GIL) ratio — debts deemed unrecoverable as a percentage of total loans — fell to 2.3% in September 2024 compared to 3.2% in the same period last year, while allowance coverage increased to 102.6% form 95%.

The common equity Tier 1 capital ratio — a measure of a bank’s capital strength based on the highest quality of regulatory capital — increased by 60bps y-o-y in September 2024 to 15%, which is well within the group’s FY2024 target.

While the positive performance is a cause of celebration for CIMB, the group is cognizant of the external uncertainties. Its group CEO Novan Amirudin said that the group will remain vigilant in managing risk amid economic headwinds and market volatility.

“Notwithstanding the positive performance, we remain cautious of external uncertainties and will monitor the macroeconomic backdrop whilst being confident in our current strategies,” he said in a statement accompanying the results.

Novan added that the group aims to strengthen its deposit franchise and embrace the theme of "simpler, better, faster" throughout its business.

“This builds on our competitive strengths, endowments and anticipated key market trends, with further details to be announced in 1Q25,” he said.

Shares of CIMB were trading at RM8.33, down by four sen or 0.48%, valuing the company at a market capitalisation of RM89.62 billion.