Business

CIMB cautious on outlook after asset sale boosts Q1 profit

May 21, 2013

KUALA LUMPUR, May 21 — CIMB Group, southeast Asia’s fifth-largest bank by assets, posted a 37 per cent jump in first-quarter net profit, boosted by the sale of an insurance business, and warned of slowing demand for the region’s exports.

CIMB has a string of banking assets in almost every country in southeast Asia, which is relying increasingly on robust domestic demand in the face of weakening exports and an uneven global economic recovery.

“We remain mindful ... of macroeconomic challenges ahead as regional policy makers respond to the slower external demand, domestic inflationary pressures and strong liquidity inflows,” Chief Executive Nazir Razak said in a statement.

Nazir said proceeds from the sale of CIMB Aviva to Malaysian state investor Khazanah and Canada’s Sun Life Financial had strengthened the lender’s capital position.

Net profit for the three months ended on March 31 grew to 1.39 billion ringgit from 1.01 billion ringgit a year earlier.

Excluding the one-off gain of 515 million ringgit from selling CIMB Aviva, Malaysia’s second largest bank recorded a net profit gain of 4.2 per cent, with single-digit per centage growth in consumer and wholesale banking.

CIMB handles the bulk of Malaysia’s share listings, which were ranked fifth globally by proceeds raised last year and fetched close to US$12 billion (RM36 billion). Deal flow slowed in 2013 due to uncertainty over a May 5 election that Nazir’s older brother, Malaysian Prime Minister Najib Razak, won by a smaller majority.

Shares of CIMB are up about 11 per cent this year, almost in line with bigger rival Malayan Banking Bhd (Maybank).

Maybank is due to announce first-quarter results on May 23. — Reuters

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