Mar 29, 2024 - $CIMB (1023.MY)$ shares rose 2.14% to 6.69MYR in trading on Friday. The company released its financial report for FY23 on March 27th. After the financial report was released, it has risen by a total of 3%.

CIMB Group records strong FY23 performance, proposes second interim dividend of 18.50 sen per share and a special dividend of RM747 million as net profit grew 28.3% to RM6.98 billion.

Malaysian banking group CIMB Group Holdings Berhad (CIMB Group) posted impressive financial results for the fiscal year ended 31 December 2023 (FY23). Key highlights include:

1. Net Profit Growth: CIMB Group achieved a substantial year-on-year (YoY) increase in net profit by 28.3%, jumping from RM5.44 billion in the preceding year to RM6.98 billion.

2. Pre-Tax Profit & EPS: The Group's profit before tax (PBT) rose 14.0% YoY to reach RM9.54 billion, translating into earnings per share (EPS) of 65.5 sen. Average Return on Equity (ROE) improved significantly to 10.7% from the FY22 figure of 9.0%.

3. Dividend Announcement: Following strong operational income growth and lower provisioning across key markets, CIMB proposed a second interim cash dividend of 18.50 sen per share, bringing the total annual interim dividends to 36.00 sen per share, adhering to a payout ratio of 55.0% in line with the Group's dividend policy. Additionally, a special dividend of RM747 million or 7.00 sen per share was declared, resulting in a record total dividend payout of RM4.59 billion for FY23, offering shareholders higher returns.

4. Operational Income and Loan Growth: Despite challenges posed by the continued high cost of deposits affecting net interest income (NII), the Group registered robust operating income growth of 5.9% YoY to RM21.01 billion, primarily driven by a surge of 36.5% YoY in non-interest income (NOII) from investment and market-related activities. Solid loan growth of 8.3% YoY and a strong expansion of 11.5% YoY in current accounts and savings accounts (CASA) contributed to this performance, underpinned by growth in all core markets and segments.

5. Capital Position: Even after the dividend distribution, the Group maintained a healthy capital position with a Common Equity Tier 1 (CET1) ratio steady at 14.5% as at the end of December 2023.

6. Efforts in Risk Management and Digital Transformation: Prudent risk management and recoveries led to reduced provisions, supporting the Group's strong FY23 performance. CIMB's commitment to enhancing its CASA and deposit franchise, alongside effective balance sheet management to improve regional net interest margins (NIM), were pivotal strategies. Over the past four years, the Group invested nearly RM3.44 billion in technology and operations to bolster resilience and digital platform reliability, achieving above-target availability and significant growth in digital transactions and revenue. Looking ahead, CIMB aims to accelerate its digital initiatives to transform customer acquisition and experience while reducing structural costs and ensuring sustainable returns from its digital ventures.

7. Regional Presence and Milestone: Celebrating its centennial anniversary in 2023, CIMB stands as one of ASEAN's leading banking groups and Malaysia's second-largest financial services provider by assets, listed on Bursa Malaysia with a market capitalization of approximately RM62.4 billion as of December 31, 2023. The Group operates across eight ASEAN nations and maintains a presence in China, Hong Kong, and the UK, with an extensive retail network of 601 branches and about 33,000 employees.

In summary, CIMB Group's robust FY23 performance was characterized by resilient revenue growth, strategic management of risks, and progressive steps towards digitization and enhanced customer experiences, culminating in improved profitability, robust asset growth, and generous shareholder returns.

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