1) Summary
CIMB Group Holdings Berhad (“CIMB Group” or the “Group”) today reported a Profit Before Tax (“PBT”) of RM4.88 billion for financial year 2016 (“FY16”). On a year-on-year (“Y-o-Y”) basis, the Group’s FY16 operating income expanded 4.4% with operating expenses remaining well under control. This translated to an 8.6% Y-o-Y improvement in pre-provisioning operating profit (”PPOP”) and a 4.5% Y-o-Y improvement in the Net Profit to RM3.56 billion compared to the Business As Usual (“BAU”) FY15 Net Profit of RM3.41 billion. The FY16 net earnings per share (“EPS”) stood at 41.00 sen with a net return on average equity (“ROE”) of 8.3%. The Group declared a second interim net dividend of 12.00 sen per share to be paid via cash or an optional Dividend Reinvestment Scheme (“DRS”). For FY16, the total dividend amounted to 20.00 sen or RM1.76 billion, translating to a dividend payout ratio of 49.5% of FY16 profits.
“We are pleased to report our highest ever revenue of RM16.07 billion and a 4.5% Y-o-Y increase in net profit to RM3.56 billion, amidst a trying business environment in 2016. Across the Group, our overhead expenses increased by only 1% Y-o-Y, contributing to the encouraging Cost-to-Income ratio. The Group’s balance sheet continued to strengthen with a commendable 8.7% Y-o-Y growth in loans, with positive CASA momentum, particularly in CIMB Niaga. Our capital management efforts have strengthened our CET1 to 11.3% from 10.3% in 2015. We have declared a 12.00 sen second interim dividend, resulting in a 49.5% payout ratio for FY16,” said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive, CIMB Group.
“Our best performing segment was Consumer, which contributed 46% of PBT, with Thailand posting its first annual profit since acquisition. For Commercial Banking, both Malaysia and Indonesia performed well, although this was tempered by higher provisions in Singapore and Thailand. Wholesale Banking recorded a commendable 11.3% growth in PBT, with strict cost controls and declining provisions.
“The disciplined recalibration of our business under T18 has strengthened the Group’s foundation to help us negotiate the unexpected challenges of 2016. This is reflected in our key financials and we remain on track to achieve most of our T18 targets by 2018,” continued Tengku Zafrul.
2) CIMB Group FY16 Y-o-Y Results
For comparative purposes, the Y-o-Y performance is based on BAU numbers for FY15. CIMB Group’s FY16 operating income grew 4.4% Y-o-Y to RM16.07 billion underpinned by a 5.3% rise in net interest income. The FY16 non-interest income grew by 2.2% Y-o-Y, inclusive of a RM150 million gain from the sale of its 51% interest in PT CIMB Sun Life in 3Q16. Operating expenses rose by 1.0% Y-o-Y although it was 1.7% lower after excluding foreign currency translation effects, reflecting benefits from the cost management initiatives. This brought about the 8.6% improvement in the Group’s Pre-Provisioning Operating Profit (“PPOP”). The Group’s PBT was 6.2% higher at RM4.88 billion, with loan provisions rising 11.1% Y-o-Y.
The Group’s Regional Consumer Bank PBT increased by 35.0% Y-o-Y in FY16 to RM2.27 billion, making up 46% of Group PBT. The stronger performance was fuelled by the Consumer operations in Malaysia, Indonesia and Thailand, as well as lower overhead expenses and provisions. While the Regional Commercial Banking’s revenues grew with costs staying relatively flat, the PBT was 55.3% lower Y-o-Y at RM283 million due to higher provisions in Thailand and Singapore. The Group’s Regional Wholesale Banking PBT was 11.3% higher Y-o-Y at RM1.96 billion with an improvement in all operating divisions. Group Asset Management and Investments (“GAMI”)’s PBT was 2.5% lower Y-o-Y due to investment impairments, while Group Funding PBT was 50.3% lower Y-o-Y from higher cost of funds and FX translation costs.
