CIMB Group Holdings Bhd posted a profit before tax of RM1.53 billion and a net profit of RM1.19 billion for the financial year ended Dec 31, 2020.
Despite the year-on-year decline in PBT and net profit, the Group’s underlying business proved resilient.
FY20 pre-provisioning operating profit declined only marginally by 1% to RM8.21 billion.
But operating income remained stable with a slight decrease of 3.4% to RM17.19 billion.
Like all businesses, the bank is also hit by the COVID-19 pandemic.
The challenging operating environment required the bank to take a hard look at all areas of business, says Dato’ Abdul Rahman Ahmad, Group Chief Executive Officer of CIMB Group.
The bank recalibrated its strategy and introduce the Forward23+ mid-term strategy in early 4Q20.
“To mitigate the challenging environment and strengthen our balance sheet, our most immediate priority was cost management,” says the CEO.
“We successfully surpassed our FY20 cost reduction target of 5% through rigorous cost optimisation measures.”
Abdul Rahman says, 2020 was defined by the acute disruption of COVID-19 on public health and the global economy, impacting individuals, businesses and governments alike.
“Pandemic-driven lockdowns and the movement control order led to economic weakness and sharp GDP contractions across our core markets.
“This resulted in revenue and profitability pressure across our business.”
But the resilience of its underlying business and improved capital position made it possible to declare a dividend payout ratio of 40%.
“We are pleased to declare a proposed annual dividend of 4.81 sen per share, based on a dividend payout ratio of 40% in line with our dividend policy.”
Abdul Rahman says the resurgence of COVID-19 means necessary restrictions will be in place until the majority of the population have been vaccinated.
Thus, the Group will maintain a cautious growth stance in FY21.
“We anticipate that economic recovery will continue to be uneven with downside risks in the short term before improving in the second half of the year.
“Enhanced risk management, prudent cost optimisation and targeted investments across the business will remain priorities as we seek to drive efficient growth. With expected lower provisions, we anticipate considerably better financial performance in FY21.”
“Moving forward, FY21 will be the first full year of our Forward23+ strategy. We recognise that disciplined execution will be crucial to its success and have developed the necessary core programmes from the strategic themes of Forward23+ to ensure delivery of specific and measurable business outcomes.”
Digital is a priority as online banking has become the primary banking experience for most customers.
The bank will continue to enhance its digital platforms to improve customer experience.
At the same time, Wealth Management will also be a key growth driver regionally.
CAPTION: Dato’ Abdul Rahman Ahmad, Group Chief Executive Officer, CIMB Group (R) and Khairul Rifaie, Group Chief Financial Officer, CIMB Group at the virtual media conference for CIMB Group’s FY2020 full-year results.