Malaysian bank CIMB Group's first-quarter profit jumps 384% to $789 million on one-off gain

KUALA LUMPUR (REUTERS) – CIMB Group Holdings on Monday reported a 384 per cent bump in its first-quarter earnings, helped by a one-off gain related to an investment in its e-wallet business, plus higher income.

A third-party investment in TNG Digital, a business jointly founded by CIMB’s wholly owned subsidiary Touch ‘n Go and China’s Ant Group, led to a revaluation gain of RM1.16 billion (S$372 million), CIMB – the second-largest lender in Malaysia by assets – said in a statement.

CIMB said the third-party investment of approximately RM200 million was from a limited partnership fund managed by a United States-based private equity firm, which invests in online and mobile payment companies globally. It did not name the firm.

“This investment is part of an ongoing fund-raising exercise undertaken by TNG Digital to accelerate its growth and expansion plans,” the bank said, adding that fund-raising initiatives would continue this year.

Reuters reported in January that TNG Digital was in advanced talks with investors to raise at least US$150 million (S$198 million).

Touch ‘n Go is the largest shareholder in TNG Digital and is expected to remain so after the exercise. It had said it was looking to close the fund-raising round by mid-year.

CIMB’s net profit for the January-March period was RM2.46 billion (S$789 million), up 384 per cent from RM507.9 million a year ago, its stock exchange filing showed.

Analysts polled by Refinitiv had forecast a first-quarter profit of RM716.94 million.

Revenue rose almost 44 per cent to RM5.96 billion. An increase in income also helped the bank to achieve its higher profit.

Net interest income – a gauge of its underlying financial performance – climbed by 8 per cent to RM3.47 billion, driven by improved net interest margins in Malaysia and Indonesia.

Net interest margins measure bank profitability.

Meanwhile, non-interest income rose 43.2 per cent to RM1.33 billion on stronger wealth management and trading income, the bank said.

Lower provisions, which slid 33 per cent due to recoveries in legacy accounts, and the absence of large impairments also helped the bank to improve underlying profitability, it said.

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