The bank has fared well in sustaining loan growth momentum.
According to Maybank Kim Eng, CIMB’s 4Q16 core net profit of MYR854m (US$191m) (-3% YoY, -2% QoQ) took FY16 core net profit to MYR3.4b (US$762m) (flat YoY) and this was within our expectations but below consensus. Positives include a) a QoQ pick-up in loan growth and NIM (+11bps QoQ), as well as b) ongoing cost management.
On the flip side, credit costs came in higher QoQ. For FY17, management targets loan growth of 7% (6% in FY16), 5-10bps NIM compression, a still elevated loan loss charge of 60-65bps (74bps in FY16), a cost/income ratio of <53%, dividend payout ratio of 40-60%, a CET1 ratio >11.5% and an ROE of 9.5% (8.3% in FY16).
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