PETALING JAYA: CIMB Group Holdings Bhd’s net profit for its fourth quarter ended Dec 31, 2021 (Q4’21) increased more than 2.7 times to RM854.51 million from RM214.98 million in the same quarter of the previous year, attributed to significantly lower provisions compared with Q4’20 at the peak of the economic disruption caused by the Covid-19 pandemic.
Revenue for the quarter, however, slipped 1.7% to RM4.59 billion, from RM4.67 billion previously.
For the whole year, CIMB’s net profit soared 289.3% to RM4.3 billion from RM1.19 billion in the preceding year, while revenue came in 14.9% higher at RM19.51 billion, compared with RM16.99 billion previously.
The group said the FY21 performance translates into a core annualised return on average equity of 8.1% and core earnings per share of 46.4 sen. Its FY21 core operating income improved 8.2% year-on-year (y-o-y) to RM18.37 billion from RM16.99 billion in FY20.
The bank highlighted that its net interest income rose 11.5% to RM13.96 billion, driven largely by net interest margin expansion and rebounding loan growth at 3.3% y-o-y. However, its core non-interest income fell 1.1% y-o-y to RM4.41 billion due to lower trading and foreign exchange gains.
CIMB reported total gross loans rose 3.3% in 2021, driven by 4.1% growth in Malaysia, 3.9% in Indonesia and 4.6% in Singapore. Meanwhile, total deposits increased 7.2% y-o-y while current account savings account (Casa) grew 10.3% y-o-y to reach a ratio of 42.5% as at December 2021, up 1.3% from the preceding quarter.
Group CEO Datuk Abdul Rahman Ahmad said it has seen strong underlying operational performance recovery across all its business segments and geographies, driven by solid growth in operating income, discipline in containing cost escalation and lower provisions.
While loan growth came in slightly below target, Abdul Rahman pointed out the bank has reshaped its portfolio towards its focused investment areas and protect asset quality to improve risk-adjusted returns, resulting in a positive asset growth momentum in Q4’21. He noted its digital businesses continued to register healthy growth with Touch ‘n Go Digital’s registered users increased 10.5% y-o-y to 16.8 million .
On prospects, the group CEO said the outlook remains mixed and uncertain due to pandemic-related developments and CIMB believes the economies it operates in will further recover in 2022 on the back of vaccination progress and economic reopening.
“Based on this, the group’s key headline targets for FY22 include core ROE of 8.5 to 9.0%, loan growth of 5.0 to 6.0%, credit income ratio of below 49.0% and maintaining our common equity tier 1 ratio above 13.0%. However, we note that our reported ROE performance will likely be sustained at 7.0 to 8.0%, affected by the one-off Cukai Makmur introduced in Malaysia for 2022.”
CIMB has proposed second interim dividend of 12.55 sen per share, bringing the total proposed annual dividend to 22.99 sen per share which translates into a payout ratio of 50%, in line with its dividend policy.