CIMB Group announces RM2,024 million Net Profit for 9M15

1) Summary

CIMB Group Holdings Berhad (“CIMB Group” or the “Group”) today reported a net profit of RM2,024 million for 9 months 2015 (“9M15”), equivalent to a net earnings per share (“EPS”) of 23.9 sen. The Group saw a 8.4% year-on-year (“Y-o-Y”) expansion in 9M15 operating income with well contained operating expenses, although increased Y-o-Y provisions brought about the 11.9% Y-o-Y reduction in the Business As Usual (“BAU”) 9M15 net profit, after excluding exceptional expenses from restructuring and the Mutual Separation Scheme (“MSS”).

The Group’s annualised BAU 9M15 net return on average equity (“ROE”) was 8.8%. For the third quarter of 2015 (“3Q15”), the Group’s BAU net profit of RM902 million was 2.9% higher quarter-on-quarter (“Q-o-Q”).

"Our continued improvement in Q-o-Q performance, amidst the prevailing economic uncertainties and challenges, reaffirms our business recalibration and the Group’s commitment towards managing cost. This is reflected in our 8.4% Y-o-Y operating income growth and containment of operating expenses over the period. In addition to the structural cost alignment initiatives of streamlining the ex-ASEAN IB operations and the MSS in Malaysia and Indonesia, we have also improved processes and increased automation to enhance efficiency. We will continue to push the cost management agenda further.

In terms of business segments, we are pleased to see the Group’s business strategies bearing results, with our Consumer and Commercial Banking operations gaining good traction across the region,” said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive, CIMB Group. 

2) CIMB Group 9M15 Y-o-Y Results

For comparative purposes, the Y-o-Y performance is based on BAU numbers for 9M15. CIMB Group’s 9M15 operating income grew 8.4% Y-o-Y to RM11.354 billion underpinned by a 12.8% improvement in non-interest income and a 6.6% growth in net interest income. The 5.5% Y-o-Y increase in operating expenses were largely due to higher personnel expenses from inflationary effects in Indonesia, bringing about a 12.4% improvement in the Group’s Pre-Provisioning Operating Profit (“PPOP”). However, the Group’s PBT was 11.7% lower at RM3.434 billion on the back of the higher corporate loan provisions from Indonesia.

The Group’s regional Consumer Bank PBT increased by 17.4% Y-o-Y in 9M15 to RM1.329 billion, making up 39% 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 6.0% lower Y-o-Y at RM490 million largely due to higher provisions in Indonesia and Thailand. The Group’s Regional Wholesale Banking PBT declined by 26.1% Y-o-Y to RM1,214 million attributed to higher Corporate Banking provisions and the softer Treasury & Markets performance, while Investment Banking operations improved as a result of better market activity and cost management, after excluding the one-off restructuring costs. Group Asset Management and Investments (“GAMI”)’s PBT was 15.8% lower Y-o-Y due to the large gains from divestments in 9M14, while Group Funding PBT declined 43.1% Y-o-Y due to higher cost of funds and lower investment returns.