KUALA LUMPUR (Aug 29): CIMB Group Holdings Bhd, like Malayan Banking Bhd, is expecting another rate cut by Bank Negara Malaysia before the end of this year, in light of escalating tensions between US and China and its impact to the global economy.

BNM has two more monetary policy meetings scheduled this year to review the Overnight Policy Rate, which are on Sept 12 and Nov 5.

"Yes, we are expecting a 25 basis points cut, though the impact on us will be marginal, depending on when in the year it happens. Obviously the later it is, the smaller the impact... It will be negligible. We expect a compression of one to two basis points on net interest margin (NIM) for FY19," CIMB Group chief executive officer Tengku Datuk Seri Zafrul Aziz said at CIMB's first half results media briefing earlier.

Nonetheless, Zafrul said the group is expecting loan growth to continue to be resilient for the rest of the year and it will be the bank's focus for the remaining second half ahead, as well as revenue generation and asset quality management.

For the first half ended June 30, 2019, the group's total gross loans grew by 6.9%, higher than the industry's 6.3% in Malaysia. CIMB's loans growth in Malaysia alone grew by 6.6%. Group-wide, total deposits were 9.9% higher year-on- year.

"For 2019 CIMB is maintaining its loan growth target of 6% for the group, and 6% to 7% for Malaysia," said Zafrul.

Earlier today, CIMB announced that net profit in its first half declined 17.8% to RM2.7 billion from RM3.29 billion in the same period last year, while revenue fell 5.8% to RM8.63 billion from RM9.17 billion.

Zafrul said the decline was due to an absence of a one-off gain of more than RM900 million from the divestment of its stake in CIMB Principal last year. "If you exclude that, then CIMB would have recorded a 14.5% growth in profit before tax," he explained.