S. Birruntha
KUALA LUMPUR: CIMB Group Holdings Bhd's net profit rose 17.7 per cent to RM1.94 billion in the first quarter ended March 31, 2024 (1Q24) from RM1.64 billion a year ago, driven by strong operating income growth and contained costs and provisions.
Group revenue for the quarter increased 12.6 per cent to RM5.63 billion from RM4.99 billion, underpinned by both net interest income (NII) and non-interest income (NOII) growth.
The group registered a higher earnings per share of 18.16 sen against 15.42 sen in 1Q23, its filing to Bursa Malaysia today showed.
CIMB's NII grew 7.7 per cent year-on-year (YoY) to RM3.79 billion attributed to the robust loan growth and NIM recovery in the banking book.
NOII grew 24.5 per cent YoY to RM1.84 billion, supported by strong capital markets and investment-related income, as well as gains from the sale of nonperforming loans.
The group's total gross loans grew by seven per cent YoY while deposit growth increased 8.2 per cent, driven by current account savings account (CASA) growth of 16.8 per cent YoY.
Its cost-to-income ratio improved to 45.3 per cent underpinned by the strong topline performance, with core operating expenses rising 8.9 per cent YoY to RM2.55 billion from inflationary pressures and technology investments.
The group's capital remains strong with a common equity tier 1 (CET1) ratio of 15 per cent as at end March 2024 compared to 14.3 per cent at end March 2023.
CIMB group chief executive officer Datuk Abdul Rahman Ahmad said the strong performance in the first quarter reflects a positive start to the financial year amidst the challenging and uncertain global environment.
He added that the group's positive revenue growth, contained cost and provisions contributed to the strong performance, especially from Malaysia and Singapore, underpinning the strength of its Asean diversification strategy.
"Focused execution of initiatives under our Forward23+ strategic plan continues to bear positive results, with strong CASA growth and recovering net interest margin (NIM) from our deposit-led strategy, which helped drive better NII performance.
"At the same time, NOII expansion remained robust and asset quality metrics continued to strengthen, reflecting the resilience of our business franchise," he said in a separate statement.
Abdul Rahman said CIMB maintains a cautious outlook for the year given the global economic headwinds with heightened geopolitical pressures, likelihood of prolonged elevated interest rates and competitive banking industry operating environment.
However, the group expects its key operating markets to be resilient and well-positioned to capture economic growth, especially from the positive impact of increased tourism economy.
Barring unforeseen circumstances, he noted that the group is optimistic of being on track to deliver on its FY24 targets on the back of positive performance from Malaysia and Singapore.
"As we push towards the completion of our Forward23+ strategic plan, we are steadfast in our focus to achieve our objectives with the continued emphasis on strengthening our deposit and CASA franchise, managing NIM, driving NOII expansion, as well as focusing on technology and operational resilience.
"On the environmental, social and governance front, we are also on track to achieve our sustainable finance cumulative target of RM100 billion by end of FY24 as part of our ambition to be an Asean sustainability leader, guided by our green, social, sustainable impact products and services framework.
"We look forward to supporting more clients and customers, while providing innovative solutions to drive the sustainable development agenda and initiatives collectively across the region," he said.