CIMB Group net profit jumps to RM1.08b in second quarter

A CIMB Bank branch is pictured in Kuala Lumpur, July 9, 2021. — Picture by Firdaus Latif
A CIMB Bank branch is pictured in Kuala Lumpur, July 9, 2021. — Picture by Firdaus Latif

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KUALA LUMPUR, Aug 30 — CIMB Group Holdings Bhd’s net profit jumped to RM1.08 billion in the second quarter ended June 30, 2021 (Q2 2021) from RM277.08 million a year earlier.

Revenue also rose 20.9 per cent to RM4.67 billion against RM3.86 billion previously on the back of stronger operating income and lower provisions, said the financial services group in a filing with Bursa Malaysia.

CIMB registered a net profit of RM3.54 billion in the first half of 2021 (H1 2021) which included a significant net contribution from exceptional items, primarily the one-off revaluation gain of RM1.16 billion from the deconsolidation of TNG Digital reported earlier in 1Q21.

“This was partially offset by RM258 million mainly related to the write-off and accelerated amortisation of intangible assets in Q2 2021.

“Consequently, reported net profit, including exceptional items, declined quarter-on-quarter from RM2.46 billion to RM1.08 billion,” CIMB said.

In a press statement, group chief executive officer Datuk Abdul Rahman Ahmad said the group’s solid performance reflects the progress made in its Forward23+ strategic plan and momentum from economic recovery experienced earlier in Q1 2021.

Despite some tapering of topline growth in Q2 2021 due to the resurgence of the pandemic across the region, the group benefitted from positive earnings recovery in H1 2021 after taking into account the low base effect from a year ago, driven by improvement in net interest margins (NIM), continued cost focus and lower provisions across the group.

“At the same time, we are heartened to see that our digital businesses continue to build momentum. TNG Digital’s registered users increased to 16.1 million, adding 600,000 users in Q2 2021 alone.

“GO+, the investment offering available in the Touch ‘n Go eWallet, has also reached 1.2 million investors within three months, with total assets under management (AUM) of RM112 million as at June 2021,” he said.

Similarly, in the region, CIMB Philippines reached 3.9 million customers and a deposit book of RM1.1 billion, with 400,000 customers added in Q2 2021.

According to the statement, gross loans contracted marginally by 0.2 per cent year-on-year (y-o-y), largely due to the challenging pandemic-affected environment and business recalibration in selected key markets as CIMB reshapes its portfolio in line with its Forward23+ strategic plan.

Total deposits slightly increased by 0.3 per cent y-o-y whilst current account savings account (CASA) continued to grow strongly at 8.7 per cent y-o-y, with the CASA ratio reaching 41.6 per cent as at June 2021.

The group’s loan-to-deposit (LDR) ratio stood at 87.8 per cent as at June 2021 from 88.9 per cent in the preceding quarter.

Moving forward, Abdul Rahman said while we saw solid performance in the first half, CIMB remained cautious due to potential downside risks in the second half.

This is primarily due to the Covid-19 Delta variant which has added to the uncertainty surrounding the opening of regional economies and economic recovery.

“Accordingly, we have lowered our loan growth guidance to two to three per cent and expect provision levels to remain elevated coupled with higher modification loss as we continue to provide repayment assistance to affected borrowers, such as the existing payment assistance programme in line with the he National People’s Well-Being and Economic Recovery Package (Pemulih) package,” he added. — Bernama

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