CIMB Group Holdings Berhad has reported a Profit Before Tax of RM 714 million for the first quarter of 2020. The weaker PBT was attributed to lower non-interest income and higher provisions across selected markets.
Net interest income grew by 4.8 percent, underpinned by steady 3.8 percent loan growth and operating expenses remained under control.
The Group’s 1Q20 net profit stood at RM 508 million, with Net Earnings Per Share of 5.1 sen and an annualised Return on average Equity of 3.7 percent.
The Group’s net profit had dropped by more than half from RM 1.19 billion in 2019.
“The first quarter was a challenging one and we foresee continued challenges for the rest of the year. Despite this, we are confident that the banking system is far more resilient today, given the lessons learnt from previous crises, and the reforms put in place as a result,”
The Group’s 1Q20 operating income remained steady at RM4.14 billion. NII expanded by 4.8 percent YoY with a marginally lower Net Interest Margin (“NIM”) of 2.44 percent, with spread compression across all operating countries.
However, the Group’s NOII declined by 15.5 percent YoY largely due to weaker trading and FX income from markets adversely impacted by Covid-19 at the tail-end of 1Q20.
Operating expenses remained firmly under control, increasing by just 0.7 percent YoY, while the higher Cost-to-Income Ratio (“CIR”) of 56.0 percent was due to the weaker income during the quarter.
The Group’s total gross loans recorded a 3.8 percent increase YoY while total deposits were 3.9 percent higher YoY, mainly contributed by performance in Singapore (+17.7 percent) and Thailand (+13.4 percent).
CIMB also stated that its Group Commercial Banking performed well operationally, with a 4 percent growth in operating income and a 0.7 YoY decline in operating expenses.
As for CIMB Islamic’s 1Q20 PBT, it rose by 3.1 percent YoY to RM 256 million, driven by a strong 19.7 growth in operating income. CIMB Islamic’s gross financing assets rose by 8 percent YoY to RM79.9 billion, accounting for 22 percent of the Group’s total gross loans. Total deposits (including investment accounts) increased by 8.5 percent YoY to RM88.8 billion.