CIMB Group aiming for 16pc return on equity for this year
CIMB Group Holdings Bhd (1023) expects a higher net profit this year after a stellar 2009, to be driven by stronger earnings from its regional operations, a more vibrant capital market and a better economy.
The second largest banking group is aiming for a higher 16 per cent return on equity (ROE) this year, which measures how well a company uses shareholder money to generate earnings growth.
Last year's ROE came in at 15 per cent, as the operating environment turned out much better than anticipated, group chief executive officer Datuk Seri Nazir Razak said. It has declared a 18.5 sen single tier dividend and will make a one-for-one bonus issue. The bonus share is meant to align its share price with the pricing on the Stock Exchange of Thailand, ahead of its planned dual listing on the bourse this June.
"We had a very good 2009, financially as well as in the overall development of our regional franchise. Our regional model remains 'work-in-progress' and we are determined to realise its full potential over the next few years," Nazir told a media briefing in Kuala Lumpur yesterday.
CIMB's net profit soared 152 per cent to RM803 million in the fourth quarter to December 31 2009, boosted by earnings from its operation in Indonesia after a banking merger. Net earnings for the full year jumped 44 per cent to RM2.81 billion from a year ago.
This year, the group aims to grow loans by 12 per cent and expand the more profitable current account and savings account deposits by 18 per cent. The dividend target stays at 18.5 sen.
CIMB's banking operations in Thailand and Indonesia are expected to contribute more to profit this year as it benefits from the group's cross-border synergy to close more deals.
The improved economic outlook this year has also led to solid deal flows in Malaysia, with a good pipeline of initial public offerings (IPOs), merger and acquisitions and ringgit bond issues, Nazir said. Malaysia may see about RM7 billion to RM8 billion worth of IPOs this year, he said.
The key challenges this year will come from the margin squeeze with stiffer competition from the foreign banks particularly, Nazir said, as well as the expected rise in interest rates.
Despite the concerns on the potential rise in bad debts in 2009, CIMB's net non-performing loans (NPLs) hit an all-time low of 2 per cent last year, having fallen from 2.3 per cent at the end of the previous year. This reflects the trend of falling NPLs at Malaysian banks despite the initial worries last year given the gloomy prospects.
The second largest banking group is aiming for a higher 16 per cent return on equity (ROE) this year, which measures how well a company uses shareholder money to generate earnings growth. Last year's ROE came in at 15 per cent, as the operating environment turned out much better than anticipated, group chief executive officer Datuk Seri Nazir Razak said. It has declared a 18.5 sen single tier dividend and will make a one-for-one bonus issue. The bonus share is meant to align its share price with the pricing on the Stock Exchange of Thailand, ahead of its planned dual listing on the bourse this June.
"We had a very good 2009, financially as well as in the overall development of our regional franchise. Our regional model remains 'work-in-progress' and we are determined to realise its full potential over the next few years," Nazir told a media briefing in Kuala Lumpur yesterday.
CIMB's net profit soared 152 per cent to RM803 million in the fourth quarter to December 31 2009, boosted by earnings from its operation in Indonesia after a banking merger. Net earnings for the full year jumped 44 per cent to RM2.81 billion from a year ago.
This year, the group aims to grow loans by 12 per cent and expand the more profitable current account and savings account deposits by 18 per cent. The dividend target stays at 18.5 sen.
CIMB's banking operations in Thailand and Indonesia are expected to contribute more to profit this year as it benefits from the group's cross-border synergy to close more deals.
The improved economic outlook this year has also led to solid deal flows in Malaysia, with a good pipeline of initial public offerings (IPOs), merger and acquisitions and ringgit bond issues, Nazir said. Malaysia may see about RM7 billion to RM8 billion worth of IPOs this year, he said.
The key challenges this year will come from the margin squeeze with stiffer competition from the foreign banks particularly, Nazir said, as well as the expected rise in interest rates.
Despite the concerns on the potential rise in bad debts in 2009, CIMB's net non-performing loans (NPLs) hit an all-time low of 2 per cent last year, having fallen from 2.3 per cent at the end of the previous year. This reflects the trend of falling NPLs at Malaysian banks despite the initial worries last year given the gloomy prospects.
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