Malaysia's CIMB sees higher profits this year on record revenue
KUALA LUMPUR, April 28 CIMB Group Holdings Bhd , Malaysia's second largest bank by assets, said on Friday it expects higher profits this year due to a stronger economy, fewer bad loans and record revenue.
CIMB has imposed measures to improve its loan book in Indonesia and Thailand, where poor performances there prevented the bank from posting a stellar 2016 despite record high revenues.
"The outlook for CIMB in 2017 should be better," Group Chief Executive Zafrul Aziz said at the group's annual shareholder meeting.
"We feel that given the measures we have taken, we are a bit more optimistic that provision levels will be lower."
CIMB's revenues rose 4.3 percent to a record high of 16.1 billion ringgit ($3.71 billion) in 2016, lifted by its consumer segment. Its net profit for the year climbed 4.5 percent to 3.6 billion ringgit ($829.30 million).
Aziz said the group expected another year of record revenues, and a corresponding improvement in profits this year.
Stronger loan growth has lifted the earnings of Malaysia's two top banks, CIMB and Malayan Banking Bhd (Maybank).
Moody's on Wednesday gave the Malaysian banking sector a stable outlook over the next 12-18 months, citing stabilising asset risks, profitability and strong capital.
CIMB Chairman Nazir Razak said Malaysia's economic outlook has improved, but the government needed to "overcome the negativities" in investor sentiment that has weakened the ringgit.
He also noted a recovery in interest among corporates to cut deals, driven by leadership changes in institutional organisations such as government-linked fund manager PNB.
"More Malaysian companies are going back out on road shows...and that is reflected positively in terms of investors coming into the stock market," he said.
($1 = 4.3410 ringgit) (Reporting by Liz Lee; Editing by Randy Fabi)