CIMB Group Holdings, Malaysia's second-largest lender, reported a 10.7 percent rise in quarterly profit against expectations for a profit drop, driven by higher net interest income, lower provisions and a more robust capital market. Malaysian banks are benefitting from a growing domestic economy and firm consumer spending, while improving optimism among businesses versus a year ago is supporting loan growth.
The Southeast Asian nation's economy posted a growth of 6.2 percent in the September quarter, the fastest pace in more than three years, lifted by strong private sector spending and exports. CIMB said in a statement its net profit for the third quarter ended September climbed to 1.13 billion ringgit ($274.54 million) from 1.02 billion ringgit a year ago. That surpassed an average estimate of 860.20 million ringgit from five analysts surveyed by Thomson Reuters.
Group CEO Zafrul Aziz said in the statement the group achieved a record quarterly operating income, particularly due to its consumer banking franchise in Malaysia and Thailand, as well as investment and corporate banking activities. The lender's revenue for the quarter rose 7.3 percent to 4.42 billion ringgit. Net interest income rose 6.5 percent. Allowances made for impairment losses on loans, advances and financing shrunk 1.2 percent year-on-year during July-Sept.
The bank said loan growth was 7 percent on-year for the Jan-Sept period, led by consumer banking. CIMB has earlier said it was confident of achieving a loan growth target of 6-7 percent for the full year. Zafrul said that the bank remained on track to meet key financial targets for 2017.
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