Fmtnews, Cımbgroup

Fmtnews, Cımbgroup

CIMB Group net profit falls to RM1.19 billion from RM4.5 billion

Performance was affected by the Covid-19 pandemic and higher loan provisions.

26/2/2021 4:00:00 PM

Performance was affected by the Covid-19 pandemic and higher loan provisions. FMTNews CIMBGroup

Performance was affected by the Covid-19 pandemic and higher loan provisions.

The CIMB Group has reported lower profits because of the Covid-19 pandemic.KUALA LUMPUR: CIMB Group Holdings Bhd’s net profit for the financial year ended Dec 31 declined to RM1.19 billion from RM4.56 billion recorded in the previous year.Revenue fell to RM17.19 billion from RM17.80 billion previously, the group said in a filing with Bursa Malaysia today.

Despite the decline in net profit, CIMB said the group’s underlying business proved resilient with pre-provisioning operating profit declining marginally by 1% to RM8.21 billion.Meanwhile, its operating income remained stable with a slight decrease of 3.4% to RM17.19 billion.

“Aggressive cost reduction targets were also exceeded with a 5.5% or RM524 million decrease in operating expenses. This led to an improved cost-to-income ratio of 52.2% down 1.2%,” it said.CIMB said its performance was largely impacted by the Covid-19 pandemic, as well as specific provisions made for pandemic-related and legacy accounts. headtopics.com

This resulted in elevated loan provisions arising from accounting adjustments incorporating macroeconomic factors and management overlays, it said.“Against this backdrop, net interest income grew marginally to RM12.73 billion despite a 14 basis points decrease in net interest margin to 2.32% due to the impact of lower interest rates and modification loss,” it said.

Group chief executive officer Abdul Rahman Ahmad said the group will maintain a cautious growth stance for the 2021 financial year given the resurgence in Covid-19 cases and the necessary restrictions until the majority of the population has been vaccinated.

Read more: Free Malaysia Today »

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Ouh sooo sad