CIMB’s Net Profit Falls 32.6 Percent in Q2

MALAYSIA – Kuala Lumpur-headquartered universal bank CIMB Group posted a 32.6 percent decline in net profit in the second quarter of this year to MYR639.75 million (USD152.6 million) from a year ago.

In a statement, the bank attributed the net profit decline to higher loan loss provisions mainly from Indonesia.

During the same quarter of last year, CIMB posted net profit of MYR949.94 million (USD226.63 million).

Net profit for the first half of its current fiscal year was also lower at MYR1.22 billion (USD291m) from the previous period’s MYR2.02 billion (USD482 million).

In its second quarter ended 30 June 2015, the bank, however, posted a 12.5 percent rise in revenue to MYR3.83 billion (USD913 million) from MYR3.41 billion (USD813 million).

The Group’s regional Consumer Bank PBT increased by 15.3 percent year-on-year in H1 of this year to MYR925 million, making up 42 percent of Group PBT.

Contributions were stronger from all geographies with the Indonesia consumer operations performing significantly better in addition to lower operational losses from Thailand.

The regional Commercial Banking PBT was 14.1 percent lower year-on-year at MYR304 million on the back increased provisions in Indonesia and Thailand.

The Group’s Regional Wholesale Banking PBT declined by 35.6 percent year on year MYR737 million attributed to increased Corporate Banking provisions and softer Treasury & Markets performance, while the Investment Banking operations improved from increased market activity after excluding the one-off restructuring costs.

Group Asset Management and Investments PBT was 6.7 percent lower year-on-year on asset revaluations, while Group Funding PBT declined 52.0 percent year on year due to higher cost of funds and lower investment returns.

CIMB Group CEO Tengku Datuk Zafrul Tengku Abdul Aziz, however, expressed confidence that the bank will perform better in the second half of this year.

At a press conference, Zafrul said he expects a better second half based on the group’s performance so far, although he said CIMB group remains cautious on the economic outlook of the last six months of the year.

“Our stance continues to be a cautious one, in light of the recent moderation of regional economies and softer capital markets. Our Malaysian operations remain robust, but we are mindful of potentially slower domestic consumption,” Zafrul told reporters. –