KUALA LUMPUR (Aug 29): CIMB Group Holdings Bhd's (KL:CIMB) earnings slipped 3.8% in the second quarter from a year earlier as lower net interest income offset higher non-interest income.
Net profit for the three months ended June 30, 2025 (2QFY2025) was RM1.89 billion, or 17.57 sen per share, according to an exchange filing. Year-on-year, net interest income was marginally lower at RM3.83 billion while non-interest income was a tad higher at RM1.77 billion.
CIMB, Malaysia’s second-largest bank by assets, also declared a first interim dividend of 19.75 sen per share.
“The group is cautiously optimistic about the macroeconomic and operating outlook for the second half of the year, supported by the gradual easing of global interest rates, while remaining vigilant of persistent headwinds from geopolitical tensions and tariff-related uncertainties,” CIMB said.
For the first half of FY2025, net profit was marginally lower at RM3.86 billion versus RM3.90 billion a year earlier. Net interest income held steady at RM7.65 billion as gross loans expanded 3.6% on a constant currency basis.
Net interest margins, a gauge of profitability from interest charged on loans after deducting returns paid on deposits, dipped five basis points to 2.16% amid multiple rate cuts and active asset-liability management to manage the cost of funds.
Non-interest income was down a tad under 4% to RM3.45 billion in the first half from a year earlier. Nevertheless, CIMB said its cross-selling strategy gained momentum with fee and commission income rising 2.0%, treasury client sales up 3.3%, and wealth assets under management growing 10.9%.
Results so far this year were within guidance with the return on equity coming in at 11.1% in the first half, in line with the target of 11.0%-11.5% for the year. Gross loans were also within 5%-7% as guided for the full year.
“With greater clarity on global tariff developments, we are seeing business confidence gradually improving,” said CIMB group chief executive officer Novan Amirudin.
CIMB also announced plans to launch a new business banking app, OCTO Biz, in Malaysia and Indonesia in the fourth quarter, with further roll-outs across other markets.
Operationally, the cost-to-income ratio narrowed to 46.2% as expenses declined 1.1% quarter-on-quarter, putting the banking group on track to meet its full-year target of under 46.7%.
In terms of asset quality, gross impaired loans — debts deemed unrecoverable as a percentage of total loans — improved to 2.1% from 2.5% a year ago. Loan loss coverage, including regulatory reserves, stood at 100.7%, down from 116.6%.
CIMB’s common equity Tier 1 capital — a measure of a bank’s capital strength based on the highest quality of regulatory capital — stood at 14.7%, above its own target of at least 14%.
At Friday’s midday trading break, CIMB shares were up one sen or 0.1% at RM7.46, valuing the banking group at RM80.27 billion. Year to date, the stock has fallen 9%.