Malaysia's CIMB Q4 profit slides 24% on provisions

KUALA LUMPUR, Feb 28 (Reuters) - Malaysian lender CIMB Group Holdings Bhd saw a 24% tumble in fourth-quarter net profit on Thursday, its fourth consecutive declined in quarterly earnings, hit by higher provisions and increased investment expenses.

In a stock exchange filing, Malaysia’s second-largest lender by assets said contribution from the wholesale banking segment fell 22.1% on year due to higher provisions, while expenses rose 60.3% from investments related to the group’s five-year business strategy.

Net profit for the October-December period was 848.64 million ringgit ($200.38 million) compared with 1.12 billion ringgit achieved a year prior. The results lagged the 957 million ringgit average of two analyst estimates compiled by Refinitiv.

Revenue was 11% higher at 4.52 billion ringgit.

Net interest income, a measure of banks’ core financial performance, jumped 10% to 2.68 billion ringgit.

The bank’s net interest margin - a key measure of bank profitability - for 2019 shrunk marginally by four basis points to 2.46% as loan loss provisions rose 14.5% to 1.64 billion ringgit.

CIMB said it maintains a cautious stance for 2020 in view of sustained global economic headwinds, trade tensions, the threat from a coronavirus outbreak, as well as potential further interest rate cuts across the region.

“CIMB Malaysia will sustain its prudent balance-sheet growth momentum, and will continue to drive the digital agenda, particularly in the areas of payments and sales enablement,” it said.

On Thursday, larger rival Malayan Banking Bhd posted a 5.2% increase in quarterly profit and a record annual profit, underpinned by strong performance in its insurance and Islamic banking businesses. ($1=4.2350 ringgit) (Reporting by Liz Lee)