Tuesday February 26, 2013
CIMB delivers record profit of RM4.35bil in 2012 - what's next?
By CHOONG EN HAN han@thestar.com.my
Something to smile about: Nazir (left) and CIMB group chief financial officer Kenny Kim at the press conference to announce the banking group’s 2012 results.
PETALING JAYA: CIMB Group Holdings Bhd has delivered another sterling performance, this time with a record RM4.35bil in net profit for the year 2012, a 7.8% year-on-year growth.
Next on its growth trajectory? Focusing on improving the performance of its fledging operations in Thailand and looking into a dual listing. “We have delivered another set of record profits for financial year 2012, underpinned by strong earnings growth in most of our business lines,” CIMB group chief executive Datuk Seri Nazir Razak told reporters after announcing the group's financial results yesterday.
He said the record year was achieved without aggressive lending growth and also despite investing and undergoing substantial internal changes in line with its CIMB 2.0 theme, in a bid to strengthen its competitive edge going forward.
Revenue for the year rose 11.3% to RM13.49bil, and net interest income grew by 10.6% while non-interest income expanded by 12.7%.
For the fourth-quarter ended Dec 31, 2012, the group's net profit was 4.5% lower at RM1.082bil due to the large gain on the deconsolidation of CIMB Aviva recorded in 2011.
“If you look at our international expansion, the one market that we are slightly behind schedule is Thailand, and we are looking for a better performance there,” he said.
He said the lagging performance was partly due to deviation from political events and natural disasters that the bank could not foresee and forecast in its growth path.
Looking into 2013, he said earnings generation would be derived from new markets coupled with synergies that the group would reap by integrating its recently acquired Royal Bank of Scotland Group plc's (RBS) Asian operations into its Asean platform. Saying the acquisition was expected to be completed by April, he added that he expects nothing particularly unusual about the integration of RBS. On market perception that the integration of RBS might face some hurdles, Nazir noted that the prognosis from the RBS acquisition had so far been positive.
“CIMB, over the past many years, has made several acquisitions, including GK Goh, Southern Bank, Bumiputera Commerce, Lippo Bank, and in the case of organic expansion, growing our business in Singapore and Cambodia from zero to where it is now,” he said.
He said the banking giant's expansion was ahead of its time and has chalked up success, consequently lifting the group's return over equity (ROE) from a single-digit growth rate to 16% now, adding that its credit growth for 2013 would be at least 15%. “We are excited about our stronger and enlarged business platform.
“We believe that we can sustain a net ROE of 16% for 2013 on our higher capital and cost base, by driving revenues and efficiencies, especially from our newly merged business units and enlarged investment banking operations,” he elaborated.
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