PETALING JAYA: CIMB Group Holdings Bhd is optimistic for the remainder of the year, given the anticipated recovery of regional economies and the expansion in domestic demand.
CIMB Group Holdings Bhd chief executive officer Datuk Abdul Rahman Ahmad hopes to see further recovery in economic activities as the countries the group operates in continue to open their economies and relax Covid-19 measures as they transition to endemicity.
“CIMB Group is ideally positioned to support our customers across the region in all business segments, and at the same time, continue to strengthen our businesses while adhering to our strategic focus areas,” he said.
However, Abdul Rahman remains cautious on the heightened risk of slower economic growth arising from the impact of inflationary pressures and geopolitical uncertainties.
“We will continue to stay on course with our Forward23+ strategic plan to strengthen our position to be the leading focused Asean bank, as we build on the positive momentum of asset growth, contained cost escalation and improved asset quality to deliver sustainable financial returns,” he said.
Moreover, Abdul Rahman disclosed that the group has identified specific focus areas of investments to accelerate its digital transformation as it looks to further strengthen its technology and operational resilience.
The group is expected to spend RM1bil in the financial year ending Dec 31, 2022 (FY22) to drive further digitalisation as well as improve technology and operational resiliency.
On the environmental, social and governance front, Abdul Rahman said the group is on track to achieve its goals to become an Asean sustainability leader, guided by its green, social, sustainable impact products and services framework which cuts across all businesses within the group to promote sustainable finance across the region.
Meanwhile, CIMB Group’s net profit was down about 42% to RM1.42bil in the first quarter ended March 31, 2022 (1Q22) from RM2.45bil a year ago due to the revaluation gain of RM1.16bil on the deconsolidation of TNG Digital in 1Q21 as well as the impact of the Cukai Makmur in 1Q22.
In a filing with Bursa Malaysia, it said the group’s revenue was lower 19.8% to RM4.73bil in the quarter compared to RM5.90bil a year ago.
“However, on a quarter-on-quarter (q-o-q) basis, CIMB recorded stronger performance with operating income increasing by 3.3% to RM4.74bil while reported net profit grew by 66.9% q-o-q to RM1.43bil from RM855mil.
“This translates to a reported return on equity in 1Q22 of 9.6%, restoring the group back to pre-pandemic levels of performance,” it added.
That said, Abdul Rahman said the strong performance seen in the first quarter was a positive reflection of the economic recovery across its markets, as well as the growing momentum in all segments of its business.
“Steady topline growth, sustained cost controls and reduction in provisions contributed to improved profitability.
“This was achieved despite the challenging investment environment as the world adjusts to geopolitical developments which have created macroeconomic headwinds and financial market volatility,” he added.
Meanwhile, Abdul Rahman pointed out that the group’s capital and liquidity positions as well as asset quality continued to strengthen amidst the current operating environment.
Elaborating further, he said CIMB saw a positive traction in loan growth as the strategy to reshape its portfolio is starting to bear results.
The group’s loan growth regained momentum, increasing by 4.9% year-on-year (y-o-y) on the back of economic recovery positively impacting most markets and segments, especially in consumer banking where loans grew 6.9% y-o-y.
CIMB Group’s total gross loans increased by 4.9% to RM384.7bil y-o-y while total deposits grew by 7% y-o-y to RM441.1bil.
At the same time, Abdul Rahman explained that ongoing cost optimisation efforts have contributed to lower operating expenses and improvement in cost-to-income ratio.