CIMB Group Announces RM3,914 million Profit Before Tax for FY15, After Restructuring Cost

1) Summary

CIMB Group Holdings Berhad (“CIMB Group” or the “Group”) today reported a Profit Before Tax (“PBT”) of RM3,914 million for financial year 2015 (“FY15”), translating to a net earnings per share (“EPS”) of 33.6 sen. After excluding exceptional expenses from restructuring and the Mutual Separation Scheme (“MSS”), the Business As Usual (“BAU”) pre-provision operating profit grew 19.3% Y-o-Y from a 9.8% growth in operating income coupled with a 3.3% (-0.5% excluding FX) growth in operating expenses. With the increased Y-o-Y provisions, the FY15 BAU net profit grew 8.0% Y-o-Y with a net return on average equity (“ROE”) of 8.6%. The Group declared a second interim net dividend of 11.00 sen per share to be paid via cash or an optional Dividend Reinvestment Scheme (“DRS”). For FY15, the total dividends amounted to 14.00 sen or RM1,193 million, translating to a dividend payout ratio of 41.9% of FY15 profits.

"Despite the difficult operating conditions in 2015, we are heartened by the numerous positives we can draw upon, including reporting our highest ever operating income and the continued strong growth shown by all business segments, in particular our regional Consumer and Commercial Banking businesses. Further, in Investment Banking, we continue to defend our market share.

CIMB Group navigated a challenging 2015 with prudence through the implementation of our business recalibration strategies and very strong focus on cost and capital management. This is reflected in the lower cost structure of the Group, with a reported cost to income ratio of 55.6% and the strengthened CET1 ratio of 10.3%," said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive, CIMB Group.

2) CIMB Group FY15 Y-o-Y Results

For comparative purposes, the Y-o-Y performance is based on BAU numbers for FY15. CIMB Group’s FY15 operating income grew 9.8% Y-o-Y to RM15,395 million underpinned by a 15.8% improvement in non-interest income and a 7.4% growth in net interest income. Operating expenses increased by a smaller 3.3% Y-o-Y largely due the foreign currency translation effects which raised both personnel and administrative & general expenses. This brought about the 19.3% improvement in the Group’s Pre-Provisioning Operating Profit (“PPOP”). The Group’s PBT was 7.5% higher at RM4,598 million, partially offset by increased corporate and commercial loan provisions.

The Group’s regional Consumer Bank PBT increased by 18.1% Y-o-Y in FY15 to RM1,726 million, making up 38% of Group PBT. Contributions were stronger fuelled by the consumer operations in Malaysia, Indonesia and Singapore. The regional Commercial Banking PBT was 6.3% lower Y-o-Y at RM666 million largely attributed to higher provisions in Indonesia and Thailand. The Group’s Regional Wholesale Banking PBT improved by 14.4% Y-o-Y to RM1,686 million from better performances at Corporate Banking and Investment Banking, while Treasury & Markets was softer on the back of weaker capital markets. Group Asset Management and Investments (“GAMI”)’s PBT was 17.8% lower Y-o-Y due to the large gains from divestments in FY14, while Group Funding PBT declined 17.2% Y-o-Y due to higher cost of funds and lower investment returns.