KUALA LUMPUR: CIMB Group Holdings Bhd, which posted a net profit of RM854.51mil in the fourth quarter ended Dec 31, 2021 (4Q21), has proposed a second interim dividend of 12.55 sen per share.
“The group proposed a second interim dividend of 12.55 sen per share, bringing the proposed annual dividend to 22.99 sen per share for a payout ratio of 50% based on core net profit, in line with the group’s dividend policy,” CIMB said in a statement.
The bank’s revenue in 4Q21 fell 1.7% to RM4.58bil against RM4.66bil in the same quarter a year ago.
In the financial year ended Dec 31, 2021 (FY21), CIMB posted a net profit of RM4.29bil, up almost 260% from RM1.19bil while revenue expanded 14.9% to RM19.5bil against RM16.99bil a year ago.
CIMB said the FY21 performance translated to a core annualised return on average equity (ROE) of 8.1% and core earnings per share (EPS) of 46.4 sen.
The improved year-on-year (YoY) performance was driven by higher operating income with recovery across all segments and markets and further supported by strong cost controls and significantly lower provisions.
FY21 core operating income improved to RM18.37bil, up 8.2% from RM16.99bil compared to FY20. Out of this, net interest income (NII) grew by 11.5% to RM13.96bil, largely driven by net interest margin (NIM) expansion and rebounding loan growth at 3.3% YoY.
However, core non-interest income (NOII) was 1.1% lower YoY at RM4.41bil due to lower trading and FX gains.
CIMB said cost remained tightly managed, with core operating expenses rising only 1.8% YoY to RM8.94bil contributing to the improvement in the core cost-to-income ratio (CIR) to 48.6% for FY21 from 51.7% in FY20.
Its core total provisions decreased by 53.6% YoY to RM3.16bil from reduced overlays and non-retail provisions. However, provisions remained relatively elevated in 4Q21 due to overlays and top-up provisions taken on legacy credit accounts impacted by the pandemic.
The group remains well-capitalised as it achieved its highest ever common equity tier 1 (CET1) ratio of 14.5%2 as at Dec-21, from 13.9% as at Sep-21 and 13.3% as at Dec-20.
“We are pleased to have ended the year on a strong note, with CIMB Group’s performance remaining resilient in FY21 despite the ongoing impact and uncertain recovery surrounding the COVID-19 pandemic.
“We have seen strong underlying operational performance recovery across all our business segments and geographies, driven by solid growth in operating income, discipline in containing cost escalation and lower provisions as per our target,” group chief executive officer Datuk Abdul Rahman Ahmad said in the statement.
He said CIMB made considerable progress on its Forward23+ strategic plan where the bank was able to meet or exceed all its FY21 profitability targets across ROE, CIR and credit cost/provisions.
“Whilst loan growth came in slightly below target as we reshaped our portfolio towards our focused investment areas and protect asset quality to improve risk-adjusted returns, we saw positive asset growth momentum in 4Q21.
“This momentum, along with the more positive economic outlook in 2022, provides confidence in our continued growth trajectory,” Abdul Rahman said.
He added that the group’s digital businesses continued to register healthy growth.
Touch ‘n Go Digital’s registered users increased to 16.8 million, up 10.5% YoY.
GO+, the investment offering available in Touch ‘n Go eWallet, has also exceeded two million investors, with total assets under management (AUM) growing by 261.8% in 4Q21 to RM492mil as at December 2021.
“Elsewhere in the region, CIMB Philippines grew its customer base by 64.5% to 5.1 million customers and its deposit book by 75.2% to RM1.29bil.
“This makes CIMB Philippines not only a leading digital bank in the Philippines but also one of the fastest growing digital banks in Asean,” Abdul Rahman said.
“While the outlook remains mixed and uncertain due to pandemic related developments such as the Omicron variant, we believe the economies we operate in will show further recovery in 2022 due to the significant progress of vaccination programmes and the opening up of economic activities. We are also hopeful of the progressive migration of customers out of repayment assistance over the year,” he added.
He said the bank would continue to assist those still impacted customers through programmes such as the Financial Management and Resilience Programme together with Agensi Kaunseling dan Pengurusan Kredit as it remained committed to helping all impacted customers navigate out of this pandemic.
Abdul Rahman said its priority remained on executing its Forward23+ strategic plan to build on its positive growth momentum, supported by a focused approach in making the necessary investments into its areas of growth such as affluent and wealth management, transaction banking and Asean network business.
“A key focus investment area is technology and operations, where we plan to invest close to RM1.20bil in FY22 as we commit to accelerating our digital transformation and further strengthen our technology and operational resilience. In addition, we will intensify efforts to advance our environmental, social and governance (ESG) agenda, in line with the group’s commitment to mobilise RM30bil in sustainable finance by 2024.”
“Based on this, the group’s key headline targets for FY22 include core ROE of 8.5 to 9.0%, loan growth of 5.0 to 6.0%, CIR of below 49.0% and maintaining our CET1 ratio above 13.0%.
“However, we note that our reported ROE performance will likely be sustained at 7.0 to 8.0%, affected by the one-off Cukai Makmur introduced in Malaysia for 2022,” Abdul Rahman said.