CIMB posts net profit decline of RM1.19b in FY20

CIMB Group Holdings Bhd’s net profit for the financial year ended December 31, 2020 (FY20), declined to RM1.19 billion from RM4.56 billion recorded in the previous year. — Reuters pic
CIMB Group Holdings Bhd’s net profit for the financial year ended December 31, 2020 (FY20), declined to RM1.19 billion from RM4.56 billion recorded in the previous year. — Reuters pic

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KUALA LUMPUR, Feb 26 — CIMB Group Holdings Bhd’s net profit for the financial year ended December 31, 2020 (FY20), declined to RM1.19 billion from RM4.56 billion recorded in the previous year.

Revenue fell to RM17.19 billion from RM17.80 billion previously, the group said in a filing with Bursa Malaysia today.

Despite the year-on-year (y-o-y) decline in net profit, CIMB said the group’s underlying business proved resilient with FY20 pre-provisioning operating profit declining marginally by 1.0 per cent to RM8.21 billion.

Meanwhile, its operating income remained stable with a slight decrease of 3.4 per cent to RM17.19 billion.

“Aggressive cost reduction targets were also exceeded with a 5.5 per cent or RM524 million decrease in operating expenses.

“This led to an improved cost-to-income ratio of 52.2 per cent, down 1.2 per cent y-o-y,” it said.

CIMB said its FY20 performance was largely impacted by the Covid-19 pandemic, as well as specific provisions made for pandemic-related and legacy accounts.

This resulted in elevated loan provisions arising from accounting adjustments incorporating macroeconomic factors and management overlays, it said.

“Against this backdrop, net interest income grew marginally to RM12.73 billion y-o-y, despite a 14 basis points decrease in net interest margin to 2.32 per cent in FY20 due to the impact of lower interest rates and modification loss,” it said.

Group chief executive officer Datuk Abdul Rahman Ahmad said the group will maintain a cautious growth stance in FY21, given the resurgence in Covid-19 cases and the necessary restrictions until the majority of the population has been vaccinated.

“FY21 will be the first full year of our Forward23+ strategy, and we recognise that disciplined execution will be crucial to its success.

“We have developed the necessary core programmes from the strategic themes of Forward23+ to ensure delivery of specific and measurable business outcomes,” he said. — Bernama

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