Friday 29 Mar 2024
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KUALA LUMPUR (Aug 29): CIMB Group Holdings Bhd is targeting to grow its gross loans by 6% for its financial year ending Dec 31, 2018 (FY18).

In the first half of FY18, the group’s gross loans (excluding the bad bank) grew 3.4% year-on-year to RM329.9 billion, according to CIMB Group chief executive officer Tengku Datuk Seri Zafrul Aziz.

“Our loans actually grew by 7% in 1HFY18, but because of the foreign exchange effect, particularly the weaker Indonesian Rupiah, we are around 3.4%. Our loans in Malaysia have done exceptionally well, growing at 9.4% year-on-year above the industry growth rate of 4.5%.

“We are optimistic that our loans growth will catch up in the second half of the year; we are on track to achieve the 6% target,” he told reporters on the release of CIMB’s 1HFY18 financial results today.

Total deposits were 1.5% higher y-o-y at RM354 billion. The group’s loan to deposit ratio (LDR) stood at 94% as of June 2018, compared with 92.4% as of June 2017.

CIMB group chief financial officer Shahnaz Jammal, who was also present, said the competitive fixed deposits market in Malaysia would not affect the group’s net interest margin (NIM).

“I don’t think there will be much impact for our Malaysian operations in terms of NIM. In Malaysia, NIM has been relatively flat and that is likely to be the case for the full year. In terms of liquidity and deposit competition, it is nothing unusual,” he said.

The group’s NIM slid to 2.52% in 1HFY18, compared with 2.71% in 1HFY17.

“The NIM compression you see on the group level is mainly because of Indonesia. For Malaysia, it is relatively stable,” added Tengku Zafrul.

CIMB reported a record net profit in both its second quarter (2QFY18) and 1HFY18 at RM1.98 billion and RM3.29 billion respectively, bolstered by a gain from the sale of its 20% stake in CIMB-Principal Asset Management and its 10% stake in CIMB-Principal Islamic Asset Management, which amounted to RM928 million.

This raised the group’s 1HFY18 return on average equity to 11.5%, and reduced its cost-to-income ratio to 46.1%.

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