RM4b record for CIMB

KUALA LUMPUR: CIMB Group Holdings Bhd yesterday reported a record net profit of RM4.03 billion for 2011, representing a 15.1% year-on-year growth and equivalent to net earnings per share of 54.2 sen.

The FY11 net return on equity (ROE) was also a record high 16.4%, but below the group’s full-year target of 17%. Its revenue was up 2.1% at RM12.12 billion.

Pretax profit was 12.4% higher at RM5.2, billion driven by lower credit losses and better cost management, said group chief executive Datuk Seri Nazir Razak (pic) in a statement.

“We delivered record profits and ROE in a year when revenue growth was subdued due to the high 2010 non interest income base, compressing interest margins and our more cautious approach to asset growth.”

For the fourth quarter (4Q11) alone, the group’s net profit of RM1.13 billion was 12% higher than 3Q11, and 29.8% above its 4Q10 net profit of RM873 million.

Last year, the group’s local consumer bank pretax profit rose 86.1% to RM1.33 billion and was also boosted CITITYby a 24% growth in retail deposits.

Indonesian unit CIMB Niaga was the largest contributor to group pretax profit at 29% while the Malaysian consumer bank’s contribution was at 26%.

CIMB Thai’s contribution was 2% with a net profit of 1.32 billion baht (RM130,600), a 58.8% improvement from 2010.

CIMB Thai enjoyed a windfall gain of one billion baht, being its share of recoveries from legacy bad loans managed by Thai Asset Management Corp, which was partly used to increase provisions following the national flood disaster.

Total loan impairment for the group declined 19.8% to RM487 million from RM607 million in 2010. Its gross impairment ratio continued to improve to 5.1% from 6.1% before.

The group announced a second interim dividend of 10.0 sen amounting to a net payment of RM743 million. This brings the total FY11 dividends to RM1.635 billion or 22.0 sen, translating to a dividend payout ratio of 40.6% of FY11 profits.

“I think 2012 could surprise on the upside as most of the downside risks are already quite visible,” said Nazir.

“Our 2012 deal pipeline is very good. Despite the anticipated slower credit growth environment for retail loans in Malaysia, we believe we can build on the huge advances we made in consumer banking as a whole last year.

“We expect CIMB Niaga to continue its high growth rates in line with robust Indonesian markets and CIMB Thai’s transformation to pick up momentum.

“We are overall cautiously optimistic and have set a ROE target of 16.4% for the year.”

“Our primary disappointment was our share price, which significantly underperformed benchmarks,” Nazir concluded.