CIMB Group's net profit up 7.8% to ~USD1.4b

Check out how CIMB fared YoY.

In a statement, CIMB Group Holdings Berhad reported a record net profit of RM4.35 billion for Financial Year 2012, representing a 7.8% year-on-year growth and equivalent to net earnings per share of 58.4 sen and net return on average equity (“ROE”) of 16.0%. The Group announced a second interim dividend of 18.38 sen in the form of cash or an optional Dividend Reinvestment Scheme (“DRS”). For FY12, the total dividends amounted to 23.38 sen or RM1.7 billion, translating to a dividend payout ratio of 40.0% of FY12 profits.

For the fourth quarter FY12 alone, the Group’s net profit of RM1.082 billion was 5.3% lower than 3Q12, and 4.5% lower compared its 4Q11 net profit of RM1.133 billion.

"We delivered another set of record profits for FY12, underpinned by strong earnings growth in most of our business lines," said Dato’ Sri Nazir Razak, Group Chief Executive, CIMB Group. “I am especially pleased that this was achieved without aggressive lending growth and despite investing and undergoing substantial internal changes in line with our “CIMB 2.0” theme, to strengthen our competitive edge going forwards.”

CIMB Group Y-o-Y Results

CIMB Group’s FY12 revenues were 11.3% higher Y-o-Y at RM13.495 billion. Net interest income grew by 10.6% while non-interest income expanded by 12.7% underpinned by a record year in capital market transactions and an uplift in treasury markets activity. Excluding the gain on deconsolidation of CIMB Aviva of RM250 million in 4Q11, the uplift in non-interest income was 19.8%. The Group’s profit before tax (“PBT”) was 9.1% higher at RM5.678 billion.

In 2012, the Group’s regional Consumer Bank PBT expanded by 23.9% Y-o-Y to RM2.323 billion. The Malaysia & Singapore consumer operations PBT grew 17.7% Y-o-Y despite only moderate revenue growth due to provision write-backs in Malaysia and our Singapore unit reaching breakeven point. The consumer banking operations’ PBT in Indonesia expanded by 45.9% Y-o-Y from a combination of better margins and growth in assets. The Thai consumer operations have yet to break-even and posted a RM3 million loss.

The Group’s regional Wholesale Banking PBT rose 23.1% Y-o-Y to RM2.868 billion largely underscored by the Treasury & Markets division and Investment Banking PBT improving by 43.8% and 18.3% respectively, in line with our best ever year in capital markets as a whole. Corporate Banking PBT was 7.0% Y-o-Y higher. Investments PBT were lower by 51.2% Y-o-Y at RM487 million due to a combination of the large gain on deconsolidation of CIMB Aviva in 2011 and initial costs related to the acquisition of selected APAC IB businesses of The Royal Bank of Scotland (“RBS”).

Consumer Banking operations remain the largest contributor to Group PBT at 41% (from 36% in FY11). Treasury & Markets contribution to Group PBT jumped to 24% from 18% in FY11. Corporate Banking, Investment Banking and Investments contributed 21%, 5% and 9% respectively.

CIMB Niaga’s PBT rose 31.8% Y-o-Y to IDR5,787 billion but its contribution to the Group was only 24.5% higher Y-o-Y at RM1.906 billion due to the 8.9% depreciation of Rupiah in 2012. CIMB Niaga accounted for 34% of Group PBT. CIMB Thai’s PBT rose 21.2% to THB1.668 billion and after GAAP and MFRS139 adjustments, its contribution to the Group was 61.9% higher at RM211 million, equivalent to 4% of Group PBT. CIMB Singapore’s PBT rose 73.3% to RM156 million increasing its share of Group PBT to 3%. Total non-Malaysian PBT increased to 41% in FY12 from 36% in FY11.

The Group’s total gross loans and credit expanded 9.8% (excluding the declining bad bank loan book) and 11.8% Y-o-Y respectively. After adjusting for foreign exchange fluctuations, the Group’s total gross loans and credit increased by 12.1% and 14.1% Y-o-Y respectively. Corporate loans increased 6.4% while retail loans and commercial banking loans grew 10.1% and 15.7% respectively.

Total Group deposits grew by 10.0% Y-o-Y but were 12.0% higher Y-o-Y after excluding foreign exchange fluctuations. This was driven by an 8.2% expansion in retail deposits and a 11.1% growth in commercial banking deposits. Corporate and Treasury deposits were 11.6% higher Y-o-Y. Geographically, deposit growth was strongest in Singapore at 41.4% from a low base, while Malaysian deposits expanded at 7.8%. Indonesia and Thailand deposits grew 4.3% and 32.1% respectively Y-o-Y in Ringgit terms. The Group’s CASA ratio increased to 35.1% from 34.2% last year while overall net interest margin was marginally lower at 3.07% from 3.12% in FY11.

The Group’s total loan impairment of RM329 million in FY12 was a 32.4% decline from the RM487 million in FY11. The Group’s total credit charge was 0.16%. The Group’s gross impairment ratio improved to 3.8% for FY12 from 5.1% as at FY11, with an allowance coverage of 82.8%. The Group’s cost to income ratio rose to 56.4% compared to 54.7% in FY11 partly as a result of new acquisitions.

CIMB Bank’s risk weighted capital ratio is expected to be 16.0% while its core capital ratio is expected to be 12.8% as at 31 December 2012 (after inclusion of FY12 net profits and proposed DRS). CIMB Group’s double leverage and gearing stood at 124.1% and 26.1% respectively as at end-December 2012.