KUALA LUMPUR (Feb 29): CIMB Group Holdings Bhd, Malaysia’s second-biggest bank by assets, said on Thursday its net profit rose nearly 30% year-on-year for the fourth quarter from a year earlier, thanks to higher operating income and lower provisions.
Net profit for the three months ended Dec 31, 2023 (4QFY2023) was RM1.72 billion compared to RM1.32 billion in the previous year’s corresponding quarter, its bourse filing showed. Net interest income was RM3.70 billion while non-interest income was RM1.67 billion. Expected credit losses on loans, advances and financing fell to RM373.68 million.
“Moving into 2024, the group remains vigilant of the global economic uncertainties due to geopolitical tensions and concerns of slowdown in China, together with continued industry competition for deposits,” said CIMB Group’s chief executive officer Datuk Abdul Rahman Ahmad.
For 2024, CIMB is targeting to raise return-on-equity of 11.0%-11.5% from 10.7% in 2023 and maintain dividend payout at 55% of net profit. Loan growth, however, may moderate to 5%-7% from 8.3% the prior year. The company is also seeking to keep cost-to-income ratio below this year’s 46.9%
For the quarter under review, the group recommended a second interim dividend of 18.5 sen per share and a special dividend of seven sen per share. This brings the total dividend declared for FY2023 to a record high of 43 sen per share, up from the previous year’s 26 sen per share.
For the full year, net profit climbed 28.3% to RM6.98 billion from RM5.44 billion a year ago. Net interest income dipped marginally by 3.5% to RM14.63 billion, while non-interest income surged 36.5% to RM6.39 billion from investment and market-related income.
“Our priority remains on completing our Forward23+ strategic plan and delivering on key focus areas", such as affluent and wealth management as well as strengthening current-account-savings-account (Casa) and deposit franchises, Abdul Rahman said.
The company will also implement “effective balance sheet management” to improve net interest margin regionally, he said. Net interest margin, a measure of profitability from lending, narrowed to 2.22% in 2023 from 2.51% a year earlier.
Total gross loans grew by 8.3% driven by stronger demand across targeted key markets and segments, while total deposits grew by 8.1%. Meanwhile, total Casa registered a double-digit growth of 11.5%.
At Thursday’s market close, shares of CIMB went up three sen or 0.47% to RM6.46. The counter has risen 62 sen or 10.62% since the start of 2024 and gained 88 sen or 15.77% over the past year.