February 28, 2019 / 8:04 AM / a year ago

UPDATE 1-Malaysia's CIMB logs 5.4 pct bump in Q4 profit on commercial banking boost

* Q4 net profit 1.12 bln rgt vs 973 mln rgt analyst f’cast

* Expects loan growth at around 6 pct in 2019

* 2018 NIM at 2.5 pct, sees further 5-10 bps contraction in 2019

* Cautious about political events in the region (Adds further earnings details, executive comments)

By Liz Lee

KUALA LUMPUR, Feb 28 (Reuters) - Malaysian lender CIMB Group Holdings Bhd posted a 5.4 percent rise in fourth-quarter net profit on Thursday, charting three years of consecutive quarterly profit increases, largely lifted by its commercial banking and group funding businesses.

The lender, Malaysia’s second-largest by assets after Malayan Banking Bhd, also achieved record quarterly profit in the first half of 2018.

CIMB’s net profit for the three months ended December was 1.12 billion ringgit ($275.3 million), compared with 1.06 billion ringgit a year prior. The performance surpassed the 973 million ringgit average of three analyst estimates compiled by Refinitiv.

Revenue was 9.8 percent lower at 4.07 billion ringgit.

Its commercial banking business swung to a profit of 190 million ringgit, helped by a reduction in provisions.

The group funding segment saw profit grow 63.9 percent to 272 million ringgit.

Net interest income fell 3.7 percent to 2.43 billion ringgit.

The wholesale banking segment saw profit drop 32.7 percent while the asset management and investment business swung to a loss during the quarter.

The bank expects loan growth for this year to be around 6 percent, and is optimistic about operations in Malaysia and Indonesia.

“Overall we are forecasting our loan growth for the whole group to be around 6 percent, driven mainly by Malaysia and Indonesia that we expect to grow around 6-7 percent,” Group Chief Executive Zafrul Aziz said at a results briefing.

Net interest margin (NIM) - a measure of bank profitability - saw a 13 basis point compression to 2.5 percent in 2018. For 2019, CIMB expects NIM to be relatively stable with a 5-10 basis point contraction.

While CIMB expects growth in the region to be robust this year, Zafrul said the bank remains cautious for 2019 in view of sustained external headwind, with elections and political developments in Indonesia and Thailand closely watched.

$1 = 4.0690 ringgit Reporting by Liz Lee and Rozanna Latiff; Editing by Stephen Coates and Christopher Cushing

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