CIMB Group Holdings Bhd has targeted a six per cent to seven per cent loan growth this year.

Group chief executive officer Tengku Datuk Seri Zafrul Aziz said for the first six months of the year, CIMB Group had achieved 6.6 per cent loan growth.

"For the second half of this year, we will focus more on several key aspects of loan growth, revenue generation and asset quality management.

"Our key financial targets for the core markets are also on track, despite the challenging operating environment due to the US-China trade war that has changed the global economic prospects," Tengku Zafrul said at a briefing on its first-half results here today.

The group`s net profit rose 14.5 per cent to RM2.7 billion for the six months ended June 30 2019.

This translated into a net earnings per share of 28.1 sen and an annualised return on average equity of 9.7 per cent, CIMB Group said in a statement today.

The 14.5 per cent increase underpinned by the group`s above-industry loan growth in Malaysia and better treasury and markets income, Tengku Zafrul said.

"Malaysia`s pre-tax profit improved 5.3 per cent YoY, contributing 67 per cent to the group`s pre-tax profit. Indonesia also posted an encouraging 20.2 per cent YoY growth, supported by its strong consumer business.

"Overall, the group remained resilient with lower loan loss provisions despite challenging external headwinds," Tengku Zafrul added.

CIMB Group, he said, would continue to invest in its people and technology, particularly in the next two years, to achieve its Forward23 objectives.

The group declared a first interim net dividend of 14.0 sen per share to be paid via cash or an optional dividend reinvestment scheme.

This amounted to a payment of RM1.36 billion, translating to a dividend payout ratio of 50.4 per cent of the first-half profits.

CIMB Group said its first-half operating income was 4.8 per cent higher YoY at RM8.64 billion.

Net interest income grew 3.3 per cent YoY from the 6.9 per cent loans growth, while the 8.5 per cent improvement in non-interest income came largely on the back of better capital market activity in the second quarter of 2019.

Its operating expenses rose 8.7 per cent YoY from incremental investments and Forward23-related expenses, bringing about a Cost-to-Income Ratio of 53.2 per cent for the first half.

Loan loss provisions declined 15.7 per cent to RM629 million resulting in an 8.7 per cent growth in the group`s pre-tax profit to RM3.56 billion.

https://www.nst.com.my/business/2019/08/517209/cimb-group-targets-70-pct-loan-growth-year

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