CIMB Group records RM3.54 billion net profit in 1H21

KUALA LUMPUR 30 Ogos - CIMB Group Holdings Berhad announced a core profit before tax (PBT) of RM3.62 billion for the first half ended 30 June 2021 (1H21), compared to RM910 million in the first half ended 30 June 2020 (1H20). 

Core net profit was RM2.62 billion from RM785 million. The improvement in performance was driven by higher operating income, strong cost containment and significantly lower provisions compared to the lower base results recorded in 1H20, which were affected due to the economic disruption of COVID-19.

The performance translates to core earnings per share (EPS) of 26.3 sen and a core annualised 1H21 return on average equity (ROE) of 9.1%. 

Accordingly, the group has proposed a first interim dividend of 10.44 sen per share this year, or a 40% payout ratio based on core net profit in line with group’s dividend policy.

For 1H21 core operating income grew to RM9.47 billion, up 18.3% from RM8.01 billion in 1H20. 

Of this, net interest income (NII) grew by 14.8% to RM7.06 billion, largely driven by improved net interest margins (NIM) in Malaysia and Indonesia. 

Core non-interest income (NOII) strengthened by 29.8% year-on-year (YoY) to RM2.42 billion, driven by stronger treasury & markets and wealth management income despite slower momentum in 2Q21.

Overall, CIMB registered a reported net profit of RM3.54 billion in 1H21 which included a significant net contribution from exceptional items, primarily the one-off revaluation gain of RM1.16 billion from the deconsolidation of TNG Digital reported earlier in 1Q21. 

This was partially offset by RM258 million mainly related to the write-off and accelerated amortisation of intangible assets in 2Q21. 

Consequently, reported net profit, including exceptional items, declined quarter-on-quarter (QoQ) from RM2.46 billion to RM1.08 billion.

Group Chief Executive Officer of CIMB Group, Datuk Abdul Rahman Ahmad said, the group’s solid performance reflects the progress made in our Forward23+ strategic plan and momentum from economic recovery experienced earlier in 1Q21. 

"Despite some tapering of topline growth in 2Q21 due to the resurgence of the pandemic across the region, the group benefitted from positive earnings recovery in 1H21 after taking into account the low base effect from a year ago, driven by improvement in NIM, continued cost focus and lower provisions across the group," he said in a statement today. 

Moving forward, he added, while the group saw solid performance in the first half, CIMB remain cautious
due to potential downside risks in the second half. 

This is primarily due to the COVID-19 Delta variant, which has added to the uncertainty surrounding the opening of regional economies and economic recovery. 

"Accordingly, we have lowered our loan growth guidance to 2-3% and expect provision levels to remain elevated coupled with higher modification loss as we continue to provide repayment assistance to affected borrowers, such as the existing Payment Assistance Programme in line with the Pemulih aid package.

“Our focused investments under our Forward23+ strategic plan are progressing well, particularly in the areas of cost rationalisation and wealth management. 

"With more than 50% of banking transactions now being carried out online, we have strengthened our digital proposition and will continue to invest in technology to enhance customer experience," he explained. - DagangNews.com