KUALA LUMPUR: CIMB Group Holdings Bhd posted a solid net profit of RM1.41 billion in the third quarter ended Sept 30, 2022 (Q3’22) from a net loss of RM100.59 million in Q3 of financial year 2021.
The strong profit rebound was largely due to significant growth in operating income of 13.7% and the absence of exceptional items in Q3’21 relating primarily to the non-cash write-down in the value of CIMB Thai.
Revenue rose to RM5 billion from RM4.4 billion on the back of improved operating income from both net interest income (NII) and non-interest income as well as reduced macroeconomic factors (MEF) and overlays provisions, It said in a filing with Bursa Malaysia.
The group’s capital remains strong with a Common Equity Tier 1 ratio of 14.1% as of September 2022 from 13.9% as of September 2021.
CIMB Group said consumer banking Q3’22 profit before tax (PBT) improved 57.1% year-on-year (y-o-y) from a combination of stronger operating income and lower provisions, while commercial banking posted a 156.5% y-o-y increase in PBT driven by stronger operating income and lower provisions from overlays.
Its wholesale banking PBT, however, fell 15% from lower operating income and higher operating expenses and provisions.
CIMB Digital Assets & Group Funding PBT improved 135.7% y-o-y from better NII from Group Funding, Vietnam and the Philippines as well as lower operating expenses.
In a separate statement, the financial institution said total gross loans increased by 9% to RM406 billion y-o-y during the nine months of FY2’22 driven by strong demand across key markets and segments in tandem with the growth in regional economies post-pandemic, while total deposits grew by 2.5% y-o-y to RM451.6 billion.
The group also registered an improved loan-to-deposit ratio of 89.9% as of September 2022, compared with 88.7% in the preceding quarter.
Total current account savings account continued to grow by 2.8% y-o-y, with the ratio was sustained at 41.7% as of September 2022.
Meanwhile, total provisions decreased by 29.5% y-o-y to RM1.42 billion due to a decline in overlays and provisions related to MEF and Covid-19, as well as lower underlying provisions from the group’s Indonesian commercial and wholesale segments.
CIMB’s group loan loss allowance coverage stood at 99.9%, with a gross impaired loans ratio of 3.5%.
“We are firmly on track to exceed our FY2022 targets as we approach year-end. Notwithstanding this, we are maintaining our cautious stance for the year ahead as we expect some tapering in loan demand given the rising interest rate environment and intensified competition for deposits in line with economic activity,” group CEO Datuk Abdul Rahman Ahmad said.
Accordingly, the group will focus on sustaining its deposits franchise with a strong emphasis on CASA retention and build on loan growth judiciously as it focuses on managing credit risk.
CIMB intends to invest RM900 million for FY22 to enhance digital platforms and strengthen technology resilience.
“This includes investments related to the implementation of additional security measures, as announced by Bank Negara Malaysia to address scams, which we fully support and have already started introducing progressively to further protect customers.
“Moving forward, we will maintain our focus and remain guided by our mid-term Forward23+ strategic plan, which we are now almost midway through, in realising our aim to be the leading focused Asean bank,” Abdul Rahman said. – Bernama