CIMB's FY14 profit falls 31.6% to RM3.1 b, dragged by Indonesian operations

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UPDATE: KUALA LUMPUR (Feb 27): CIMB Group Holdings Bhd’s net profit dropped 31.57% to RM3.11 billion for the financial year ended Dec 31, 2014 (FY14), from RM4.54 billion a year ago.

This translated into an earnings per share of 37.48 sen, compared to 59.97 sen in FY13.

Revenue fell 3.58% to RM14.15 billion, from RM14.67 billion.

In a statement, CIMB said excluding exceptional gains in both FY14 and FY13, the group’s "business as usual" net profit for FY14 actually decreased by 24.6% year-on-year.

CIMB (fundamental:1.35; valuation:2.1) group chief executive Tengku Datuk Zafrul Tengku Abdul Aziz said in a statement that 2014 was a difficult year for the group, with profitability impacted by slower revenues and a sharp increase in provisions for corporate banking loans in CIMB Niaga, as well as in Malaysia.

“This was partially exacerbated by the weakened rupiah. Capital markets continued to be challenged by low volumes and volatility, which affected the investment bank and treasury and markets operations.

"However, we remain heartened by positive performances at the Malaysian consumer bank and CIMB Bank Singapore, while CIMB Thai is showing operational traction," he added.

Meanwhile, in the fourth quarter of FY14 (4QFY14), CIMB’s net profit fell 80.7% to RM200.32 million, from RM1.04 billion a year ago. EPS for the quarter dropped to 2.38 sen, compared to 13.5 sen in 4QFY13.

Revenue was at RM3.67 billion, down 3.29% compared to RM3.8 billion a year earlier.  

CIMB proposed a dividend of 5 sen, bringing its total dividend of FY14 to 15 sen.

On its prospects, the group said 2015 remains challenging, with slowing economic growth and nearer term asset quality concerns in Indonesia.

CIMB closed 12 sen or 2.06% lower at RM5.95, with a market capitalisation of RM49.11 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)