CIMB Group Holdings Bhd reported a net profit of RM5.58 billion for financial year 2018 (“FY18”).

This raised the Group’s FY18 Return On average Equity (“ROE”) to 11.4%, and reduced its Cost-to-Income Ratio (“CIR”) to 49.8%, on a year-on-year (“Y-o-Y”) basis.

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 FY18, the total dividend amounted to 25.00 sen or RM2.37 billion, translating to a dividend payout ratio of 50.8% of FY18 Business-As-Usual (“BAU”) profits.

“We are pleased to announce a record PBT of RM7.20 billion in FY18 despite the challenging operating landscape. The notable FY18 results was underpinned by strong performances from Consumer and Commercial banking, as well as lower provisions and costs. Our ROE is higher at 11.4% whilst CET1 strengthened to 12.6% and loan loss charge improved to 0.41%,” said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive, CIMB Group.

On a BAU basis, excluding the RM928 million gain from the sale of 20% of CIMB-Principal Asset Management (“CPAM”) and 10% of CIMB-Principal Islamic Asset Management (“CPIAM”), Profit Before Tax (“PBT”) was RM6.27 billion for FY18 representing a 2.7% year-on-year (“Y-o-Y”) growth.

Lower Y-o-Y operating expenses of 5.2% and loan loss provisions of 35.8% contributed to the Group’s increase in FY18 BAU net profit by 4.0% Y-o-Y to RM4.66 billion. This was achieved despite a 6.6% Y-o-Y drop in operating income due to weaker capital markets in Malaysia and NIM compression in Indonesia. The FY18 net earnings per share (“EPS”) stood at 49.8 sen, while the annualised ROE was 9.6%.

2) CIMB Group FY18 Y-o-Y Performance (BAU basis) 

CIMB Group’s FY18 operating income was 6.6% lower Y-o-Y at RM16.45 billion from a 16.0% decline in non-interest income due to slower capital markets in Malaysia and a 2.5% decline in net interest income mainly from NIM compression in Indonesia.

This was offset by a RM163 million gain from the sale of 50% of CSI in 1H18. The Group’s PBT was 2.7% higher Y-o-Y at RM6.27 billion, with operating expenses and loans provisions declining by 5.2% and 35.8% YoY, respectively. The FY18 CIR stood at 52.6%.

The Group’s Consumer Bank PBT was 15.2% higher Y-o-Y in FY18 at RM2.96 billion, making up 47% of Group PBT. The better performance was attributed to 39.2% lower provisions with revenue growth underpinned by net interest income and non-interest income.

The Commercial Banking PBT increased by 180.1% Y-o-Y from its regional business recalibration, as the lower cost and provisions were partially offset by a decline in operating income.

PBT at the Group’s Wholesale Banking division declined 31.7% Y-o-Y to RM1.75 billion from the significantly weaker capital markets during the year and higher provisions. Group Asset Management and Investments (“GAMI”) PBT dropped 16.7% Y-o-Y from the deconsolidation of CPAM and CPIAM, despite better performances in the private market. Group Funding PBT increased 30.1% Y-o-Y mainly from the RM163 million gain arising from the sale of 50% of CSI.

 “We remain cautious for 2019 in view of sustained external headwinds. Global economic and political developments will have an impact on our markets. In addition, we are also watching elections and political developments in Indonesia and Thailand closely.”

“Notwithstanding these uncertainties, we expect ASEAN’s growth rate to remain robust. As for the Group, CIMB is now in its transformative growth phase, and we are confident that our Forward23 five-year strategic plan will place us on a sustainable growth path, with a focus on advancing the interests of not only our customers, but also society.”

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