CIMB Group announced that the Group achieved a core1 profit before tax (PBT) of RM2.10 billion for the first quarter ended 31 March 2022 (1Q22), up 17.5% year-on-year from RM1.79 billion recorded in the first quarter ended 31 March 2021 (1Q21).
The Group sustained its core pre-provisioning operating profit (PPOP) YoY to reach RM2.51 billion whilst core net profit positively grew by 16.0% YoY to hit RM1.55 billion. The performance translates to a core annualised return on average equity (“ROE”) of 10.5% and core earnings per share (“EPS”) of 15.2 sen.
1Q22 core operating income was flat YoY but grew 2.9% QoQ reaching RM4.74 billion. Out of this, net interest income (NII) grew by 3.8% YoY to RM3.55 billion, despite a marginally lower net interest margin (NIM) of 2.45% mainly due to the Group’s Indonesia business. Core non- interest income (NOII) declined by 10.9% YoY to RM1.19 billion due to weaker global investment environment.
Loan growth regained momentum, increasing by 4.9% YoY on the back of economic recovery positively impacting most markets and segments, especially in Consumer Banking where loans grew 6.9% YoY.
Deposits also increased by 7.0% driven by strong CASA growth of 9.9% YoY, which translates to an improvement in CASA ratio from 42.3% recorded in Mar-21 to 43.5% in Mar-22.
The Group’s capital position remains strong and above target with its common equity tier 1 (CET1) ratio at 14.5% as at Mar-22, up from 12.9% as at Mar-21 and 14.5% as at Dec-21.
The Group’s cost-to-income ratio (“CIR”) improved to 47.0% compared to 51.6% in 4Q21 and 47.2% in 1Q21 as core operating expenses decreased by 0.8% YoY from continued stringent cost controls. Total provisions also declined significantly by 43.9% YoY from RM756 million recorded in 1Q21 to RM424 million in 1Q22. This was due to improved asset quality on the back of positive migration of customers from repayment assistance programmes, as well as writebacks from the recovery of legacy credits.
On a reported basis that includes one-off non-recurring exceptional items, CIMB Group’s operating income and net profit declined by 19.8% and 41.9% YoY to RM4.74 billion and RM1.43 billion respectively. The contraction was mainly due to the revaluation gain of RM1.16 billion on the deconsolidation of TNG Digital in 1Q21 as well as the impact of Cukai Makmur in 1Q22.
On a QoQ basis, CIMB recorded stronger performance with reported operating income increasing by 3.3% to RM4.74 billion whilst reported net profit grew by 66.9% QoQ to RM1.43 billion from RM855 million. This translates to a reported ROE in 1Q22 of 9.6%, restoring the Group back to pre-pandemic levels of performance.
