KUALA LUMPUR – CIMB Group Holdings Bhd’s net profit dipped 80.75 per cent to RM194.44 million in the third quarter (Q3), from RM1.01 billion in the same quarter last year.
Revenue also shrank to RM4.46 billion from RM4.64 billion previously.
In a filing with Bursa Malaysia today, CIMB said on a year-on-year (y-o-y) basis, its operating income fell 3.7 per cent to RM4.47 billion, largely due to weaker fee-based non-interest income (NOII), and lower net interest margin (NIM) arising from Bank Negara Malaysia’s Overnight Policy Rate (OPR) cuts and low-interest-rate environments in core markets.
For the cumulative nine-month period ending September 30, the group recorded a lower net profit of RM979.45 million against RM3.71 billion in the same period in 2019, while revenue slid to RM12.47 billion from RM13.27 billion previously.
In a press statement, group chief executive officer Datuk Abdul Rahman Ahmad said the Q3 performance was within the group’s expectations while taking into account the impact of the Covid-19 pandemic.
“The Q4 economic outlook remains subdued given the resurgence of COVID-19 cases domestically and globally,” he said.
However, he noted that the group was encouraged to see quarterly improvements with underlying performance remaining resilient despite the impact of elevated provisioning on specific accounts, modification loss and macroeconomic adjustments.
“The group also registered strong operating income across nearly all segments amidst a further OPR cut in Q3 to 1.75 per cent in Malaysia and the low-interest-rate environment in our core markets.”
“This was driven by a strong rebound in wealth management and bancassurance units, supported by an improved current account savings account (CASA) ratio and stronger loan growth group-wide,” he said.
Rahman added the group was pleased to see a significant contribution from its wholesale banking treasury and markets operation to the Q3 performance, as well as an improved investment banking activity.
According to the statement, the group’s underlying business remained resilient as operating income grew quarter-on-quarter (q-o-q) across nearly all segments, with gross loans and deposits increasing by 1.6 per cent and 6.1 per cent, respectively, while CASA ratio strengthened to 40 per cent.
The group’s wholesale banking operating income in Q3 grew by 7.7 per cent q-o-q, driven by 22.3 per cent growth in NOII and 1.7 per cent growth in NIM.
Moving forward, Rahman said the group would continue to support customers and communities during this challenging period.
“We are working closely with the government, and support all initiatives, to prioritise customers who have been financially affected by the pandemic.”
“In order to ensure our business remains resilient against shocks, we will sharpen our focus on cost optimisation, prudent capital management, and proactive measures to strengthen asset quality,” he said. – Bernama, November 27, 2020
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