CIMB Quarterly Profit Falls 5% as IPOs Slow in Kuala Lumpur

CIMB Group Holdings Bhd. (CIMB), Malaysia’s second-largest bank by assets, reported a 5 percent drop in quarterly profit as initial public offerings slowed.

Second-quarter net income dropped to 1.05 billion ringgit ($317 million), or 14 sen per share, in the three months ended June 30 from 1.11 billion ringgit, or 15 sen per share, a year earlier, according to a stock exchange filing today.

CIMB helped manage three of Asia’s biggest IPOs in Malaysia last year, including palm oil producer Felda Global Ventures Bhd.’s $3.3 billion share sale in June 2012. The Southeast Asian nation hasn’t hosted a share sale of more than $500 million since pay-TV operator Astro Malaysia Holdings Bhd. listed in October.

“We are going through the tougher macro operating environment that we have been bracing for as evident in our relatively slower asset growth rates in recent quarters,” Nazir Razak, CIMB’s chief executive officer, told reporters in Kuala Lumpur today.

Malaysia cut its growth forecast this year after second-quarter expansion missed economists’ estimates. The economy may expand 4.5 percent to 5 percent in 2013, from a previous prediction of as much as 6 percent, the country’s central bank said last week.

“At the operational level, we will do better in the second half on improved momentum from Malaysia and Singapore consumer and regional banking and more flows in the treasury markets,” Nazir said.

Philippines Interest

CIMB is still keen on establishing a greater presence in the Philippines after scrapping a plan to buy 60 percent of Bank of Commerce this year, he said.

The bank’s shares fell 0.8 percent to 7.48 ringgit before the earnings announcement. The stock has dropped 2 percent this year, compared with a 4.5 percent gain in the benchmark FTSE Bursa Malaysia KLCI Index.

Net interest income, or revenue from borrowers after deducting interest paid to depositors, rose 6 percent to 1.98 billion ringgit in the period, the filing showed.

To contact the reporter on this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net

To contact the editors responsible for this story: Barry Porter in Kuala Lumpur at bporter10@bloomberg.net; Chitra Somayaji in Hong Kong at csomayaji@bloomberg.net

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