* CIMB Q1 net profit fell 22 percent
* Strong loan growth in Southeast Asian markets
* Thailand a concern due to political tensions
By Yantoultra Ngui
KUALA LUMPUR, May 22 CIMB Group Holdings Bhd
, Malaysia's second-largest lender, posted its highest
quarterly net interest income in 13 years, but future growth may
slow due to political tensions in Thailand and challenging
environment in Indonesia.
CIMB, Southeast Asia's fifth-largest bank by assets, earned
net interest income of 2.066 billion ringgit ($642.81 million)
in the first quarter to March, the highest since 2000, thanks to
strong growth in regional corporate banking and consumer banking
in Malaysia and Singapore.
Southeast Asian banks have been on a roll, benefiting from
booming property markets and double-digit growth for both
consumer and corporate loans in rapidly expanding economies like
Indonesia, Singapore and Thailand.
Both CIMB and rival Maybank notched up record
annual earnings last year, while Singapore's top three, led by
DBS Group Holdings, all booked their best-ever first
quarter last month.
But now CIMB sees challenging operating environments ahead
in Indonesia and Thailand, its second and third-largest earnings
"The operating environment in the regional capital markets
as well as Indonesia as a whole remain challenging," CIMB Group
Chief Executive Nazir Razak said in the statement on Thursday.
"We also have to adjust our growth expectations in Thailand as
political tensions show little sign of abating," he added.
CIMB posted a 23 percent year-on-year drop in first-quarter
net profit, mainly due to a net gain from the sale of a business
unit CIMB Aviva in the same quarter a year earlier.
Without the net gain, net profit for January-March rose 4.4
percent to 1.07 billion ringgit from 1.02 billion ringgit a year
ago, driven by stronger growth in Singapore, regional corporate
banking, Malaysian and Singapore consumer banking, the bank
Revenue for the quarter dropped 10.3 percent year-on-year to
3.54 billion ringgit, according to filing with the local stock
Shares of CIMB, which counts state investor Khazanah
Nasional as major shareholders, have fallen 3.41
percent so far this year, underperforming the broader market
this year which has climbed 0.54 percent.
Bigger rival Maybank is scheduled to report earnings on May
($1 = 3.2140 Malaysian ringgit)
(Reporting by Yantoultra Ngui; Editing by Sunil Nair, Edwina
Gibbs and Matt Driskill)