CIMB Group Holdings Berhad in its first half performance announced a core profit before tax of RM4.26 billion for the first half ended 30 June 2022, compared to RM3.62 billion in the first half ended 30 June 2021.
It’s core net profit increased by 18.4% to RM3.10 billion from RM2.62 billion in the preceding year. The positive performance
was driven by higher operating income, contained cost escalation as well as lower provisions across key markets. This translated to earnings per share of 30 sen and a core annualised 1H22 return on average equity of 10.4%.
Accordingly, the Group has proposed the first interim dividend of 13 sen per share this year, comprising 2.60 sen in cash and 10.40 sen in Dividend Reinvestment Scheme (“DRS”). This amounts to RM1.36 billion, resulting in a dividend payout ratio of 50%, which is in line with the Group’s dividend policy.
1H22 operating income was up by 2.7% YoY to RM9.62 billion. Out of this, net interest income (“NII”) grew by 3.8% to RM7.22 billion largely from strong loan growth despite a slight contraction in net interest margin (“NIM”) YoY. This was partially offset by a marginal decline in non-interest income (“NOII”) YoY to RM2.4 billion, due to weaker trading and foreign exchange income arising from the challenging investment environment. However, NOII expanded 1.9% QoQ due to increased fees and commission, as well as non-performing loan (“NPL”) recoveries.
Total gross loan and deposit growth momentum continued, driven by key markets and business segments. Total CASA expanded by 7.3%, which in turn improved the CASA ratio from 41.6% in Jun-21 to 42.3% in Jun-22. The Group’s cost-to-income ratio (“CIR”) recorded an improvement YoY to 46.5%, with core operating expenses increasing only 1.7% to RM4.47 billion in 1H22 due to higher marketing expenses and planned technology investments. Accordingly, the Group’s core pre-provisioning operating profit (“PPOP”) strengthened to RM5.15 billion, up 3.5% YoY.
On a reported basis, which includes one-off non-recurring exceptional items, CIMB Group’s operating income and net profit declined by 8.6% and 23.5% YoY to RM9.62 billion and RM2.71 billion. The group said this was mainly due to the one-off revaluation gain of RM1.16 billion recorded on the deconsolidation of TNG Digital in 1Q21, as well as the higher impact from Cukai Makmur. This translated to a reported ROE of 9.1% in 1H22. Compared with 2Q21, the Group added its operating income was higher by 5.7% on the back of strong asset growth, mainly from Consumer and Corporate Malaysia. This, together with lower provisions, resulted in a PBT growth of 17.5% YoY.
Commenting on the results, Dato’ Abdul Rahman Ahmad, Group Chief Executive Officer of CIMB Group said, “Strong topline growth, continued cost discipline and lower provisions across all businesses and markets have contributed to the positive performance in 1H22. We are seeing an upward trend on our loans and deposits which recorded healthy growth of 6.8% and 5.7%, respectively as efforts to reshape our portfolio are starting to crystallise.”
The group initiated its Forward23+ strategic plan which it said is continue to show positive outcomes. Indonesia and Thailand, in particular, have seen strong traction in business performance, enabling the Group to benefit from its ASEAN diversification. Gross Loans and Deposits CIMB Group’s total gross loans increased by 6.8% to RM394.3 billion YoY while total deposits grew by 5.7% YoY to RM444.3 billion. The Group registered a loan-to-deposit (“LDR”) ratio of
88.7% as at Jun-22, an improvement of 1.5% from 87.2% in the preceding quarter. Additionally, CASA continued to improve by 7.3% YoY, with CASA ratio recording 42.3% as at Jun-22.
Moving Forward the group remains confident to achieve positive financial performance and we are currently on track to exceed its FY22 targets across all profitability metrics and will continue to be guided by its Forward23+ strategic plan to strengthen CIMB’s position to be the leading focused ASEAN bank.
