CIMB’s Q4 earnings drop 24%, declares 12 sen dividend

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CIMB’s Q4 earnings drop 24%, declares 12 sen dividend 1

KUALA LUMPUR: CIMB Group Holdings Bhd saw a 24% drop in its net profit for the fourth quarter ended Dec 31, 2019, to RM848.6 million, from RM1.1 billion in the previous corresponding quarter due to a decline in non-interest income (NOII) and a lower gain on a non-performing loan sale during the quarter.

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Revenue stood at 4.52 billion, 11% higher than RM4.1 billion previously.

The group declared a second interim net dividend of 12 sen per share to be paid via cash.

For FY19, the total dividend amounted to 26 sen per share or RM2.55 billion, translating to a higher dividend payout ratio of 56%.

For the full year, the group’s net profit declined 18.3% to RM4.6 billion, from RM5.9 billion, while revenue went up 2.4% to RM17.8 billion, from RM17.4 billion a year ago.

FY19 operating income grew 8.2% year-on-year (yoy) to RM17.8 billion, underpinned by growth in net interest income (NII) and NOII.

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NII grew 6.3% yoy to RM12.66 billion from a 6.7% improvement in loan growth, while the 12.9% improvement in NOII to RM5.14 billion came largely on the back of improved capital market activity.

The gross loan growth of 6.7% was attributed to strong growth posted by Thailand and Malaysia. Total deposits were 5.8% higher yoy, while the loan to deposit ratio stood at 92% from 91.2% at Dec 31, 2018.

Net interest margin (NIM) was relatively flat at 2.46%, with some spread compression in Malaysia and Thailand, partially offset by an improvement in Indonesia.

As at Dec 31 2019, CIMB Group’s total capital ratio stood at 16.8% while the Common Equity Tier 1 capital ratio stood at 12.9%.

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CIMB group CEO Tengku Datuk Seri Zafrul Aziz said the group’s FY19 performance was within expectations amid numerous macro challenges.

“2019 would be a year of investments under Forward23 and we are happy to see these investments beginning to bear fruit. We are also pleased that our underlying operating income showed robust growth.

“I am also happy to note that for Malaysia, we are on track in disbursing our RM15-billion allocation to SMEs, and in assisting the B40 through our RM12-billion allocation for financing and related products,” he said in a statement.

Moving forward, Zafrul added that the group continues to maintain a cautious stance for 2020 in view of sustained global economic headwinds, trade tensions, the threat from the Covid-19 outbreak as well as potential further interest rate cuts across the region.

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“Tangible progress has been made in our Forward23-related investments to future-proof the group. The year 2020 will be a year of continued investment in our people and technology, to ensure the group’s resilience in an increasingly challenging operating landscape.

“However, we remain cautiously optimistic that in 2H20, the Malaysian economy, in particular, will improve from the recently announced stimulus package and other private sector initiatives,” he said.


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