CIMB reported second-quarter net profit of MYR 1.94 billion ($482 million), up 2.6% year on year and 1.2% from the previous quarter.

Sequentially, total income increased 2.8% as non-interest income and net interest income grew. Year on year, however, operating income fell 0.7% and profit before tax declined 1.5%. Lower tax expense and a smaller allocation to non-controlling interests allowed profit attributable to shareholders to increase.

First-half net profit was broadly unchanged at MYR 3.86 billion ($957 million). Profit before tax declined 2.2% to MYR 5.16 billion ($1.28 billion), while return on equity eased to 11% from 11.1%.

CIMB’s first year under Forward30 showed stronger client-franchise income and a more selective approach to capital allocation. Its decision to divest CIMB Thai’s auto-financing business made that approach more concrete. In the first half of 2026, wholesale banking and client income provided greater support, making those priorities more visible in the earnings mix.

Underlying wholesale operating growth remained limited, however, while higher provisions and weaker contributions from consumer banking, Malaysia and Indonesia offset the gains.

CIMB wholesale profit rises with support from provision writebacks

Wholesale banking generated first-half profit before tax of MYR 2.16 billion ($535 million), up 7% and equivalent to 42% of group profit before tax. Wholesale loans increased 8.9% in constant-currency terms, faster than the group’s overall loan growth of 5.1%. Treasury and Markets profit increased 14.2%, while investment-banking profit grew 21.2%. Corporate-banking profit declined 0.5%.

The division’s operating income fell 0.2% to MYR 3.09 billion ($768 million), while pre-provision operating profit increased 0.4% to MYR 1.94 billion ($480 million).

Net provision writebacks increased by about MYR 133 million ($33 million) to MYR 221 million ($55 million), accounting for most of the MYR 141 million ($35 million) increase in wholesale profit before tax.

The first-half results also provide early evidence of stronger client activity across the businesses CIMB is seeking to connect. Wealth income increased 13.9% to MYR 672 million ($167 million), while income from fees, wealth and treasury client sales grew 6.2% in constant-currency terms. Total non-interest income increased 3.1% to MYR 3.56 billion ($883 million), or 8.2% after excluding currency movements.

CIMB said financing corporate, artificial-intelligence infrastructure and data-centre clients was also generating foreign-exchange and operating-account business. It is seeking to extend those relationships into capital-market issuance and wealth distribution.

“We advise a lot of issuers to issue capital-market instruments. We then structure those products and distribute them to our wealth franchise,” Novan Amirudin, Group Chief Executive Officer, said.

These figures begin to show stronger activity across CIMB’s wholesale and wealth businesses, although the group has not disclosed how much revenue is generated directly by cross-selling between them. Wholesale operating income nevertheless remained broadly flat despite faster asset growth.

CIMB asset growth supports net interest income as margins narrow

First-half net interest margin narrowed 10 basis points to 2.06%, contributing to a 3.1% decline in reported net interest income. In constant-currency terms, net interest income increased 1.7% as balance-sheet expansion absorbed part of the margin pressure.

Total assets grew 6.3% year on year in constant-currency terms, within CIMB’s full-year target of 5% to 7%. Gross loans increased 5.1%, led by the wholesale portfolio, while deposits expanded 8%.

Deposit growth provided sufficient funding for lending, with the loan-to-deposit ratio declining to 85.4% from 88%. The funding mix was less favourable, as the current and savings account ratio fell to 42.6% from 44%.

Much of the deposit growth came through wholesale banking. Wholesale deposits increased 17.9% in constant-currency terms, compared with 2.4% growth in consumer deposits. Management said Malaysia’s six-basis-point sequential decline in margin was mainly due to higher deposit costs, particularly wholesale funding raised to support asset growth.

Khairul Rifaie, Group Chief Financial and Strategy Officer, said CIMB expected its full-year margin to be stable or decline by as much as 10 basis points. “With that strong pipeline of asset growth, we should still record moderate to good NII growth,” he said.

CIMB expects margin pressure to ease as loans reprice in Indonesia and lower-cost deposits grow. For now, balance-sheet expansion is preserving net interest income while the return generated from those assets remains under pressure.

Higher provisions weigh on CIMB consumer banking, Malaysia and Indonesia

First-half loan impairments increased 14.7% to MYR 798 million ($198 million), lifting the annualised loan-loss charge to 34 basis points from 29 basis points. The second-quarter charge reached 38 basis points, above CIMB’s full-year guidance range of 25 to 35 basis points.

Rifaie attributed the higher first-half provisions to pre-emptive overlays for inflation and risks associated with the Middle East conflict, the absence of writebacks recorded a year earlier and a change in the treatment of repossessed vehicles in Indonesia.

Consumer banking shows how higher provisions affected the group result. Its pre-provision operating profit increased 2.6% as expenses declined and wealth income grew, but provisions rose 64.4%. Profit before tax consequently fell 16% to MYR 1.26 billion ($312 million).

Group asset-quality measures remained broadly stable, although the improvement was not uniform. The gross impaired loan ratio improved to 1.6% from 2.1% a year earlier. Allowance coverage stood at 99.5% before regulatory reserves and 133.2% after including them.

Malaysian impaired loans increased 12.2% from December, driven largely by higher impaired Islamic financing. Impaired loans declined in Indonesia and Thailand, helping to reduce the group total. The movement supports management’s assessment that there was no broad deterioration, but shows that conditions differed across markets and portfolios.

Malaysia and Indonesia, which accounted for 79% of group profit before tax, provided the largest geographical drag. Malaysia’s profit before tax declined 4.2% to MYR 3.05 billion ($758 million) as higher pre-emptive provisions offset revenue growth.

Indonesia’s contribution fell 16.6% in ringgit terms to MYR 1.03 billion ($257 million). Currency translation accounted for part of the decline, but CIMB Niaga’s local-currency profit before tax also fell 2.4% as provisions increased 60.2%. Its non-interest income nevertheless grew 25.1%.

Higher profit from Singapore and Thailand was insufficient to offset the declines in CIMB’s two largest markets.

Currency movements obscure CIMB’s underlying cost performance

First-half operating expenses declined 1.2% to MYR 5.07 billion ($1.26 billion), leaving the cost-to-income ratio unchanged at 46.2%. Excluding currency movements, expenses increased 3.9%, slightly faster than the 3.7% increase in operating income. The reported cost reduction is therefore not conclusive evidence of underlying efficiency gains.

The sequential figures were stronger. Second-quarter expenses declined 1.6% from the previous quarter, or 1% in constant-currency terms, and the cost-to-income ratio improved to 45.2% from 47.2%.

Part of that improvement was non-recurring. Rifaie said personnel costs benefited from the timing of bonus provisions, while technology expenses included provision writebacks related to projects going live. He described underlying personnel and technology costs as stable.

CIMB is seeking to simplify processes before applying technology and artificial intelligence. “If something used to take six steps, why not three steps?” Amirudin said. The programme includes early collections, transaction monitoring, risk models and tools for relationship managers, and is not presented solely as a reduction in employee numbers.

The group expects expenses to decline as one-off transformation costs roll off, although it has not quantified the savings already realised or separated them from currency movements and other temporary cost benefits.

CIMB retained its full-year targets of return on equity between 11% and 11.5%, constant-currency asset growth of 5% to 7%, a cost-to-income ratio below 47% and a loan-loss charge of 25 to 35 basis points.

The bank reported a Common Equity Tier 1 ratio of 14.0%, against its target of at least 14%. The interim accounts show a ratio of 14.458% before the proposed dividend and 13.911% after it, indicating a difference from the rounded ratio presented in the results materials.

CIMB declared a first interim dividend of 19.65 sen per share, equivalent to MYR 2.1 billion ($521 million) and a payout ratio of 55.4%. It has completed MYR 700 million ($174 million) of its MYR 2 billion ($497 million) multi-year capital-return programme.

Wholesale banking increased its share of CIMB’s reported earnings in the first half, but this has yet to coincide with higher group returns. Return on equity remained at 11%, while most of the increase in wholesale profit before tax reflected higher provision writebacks and operating income remained broadly flat. Stronger client income and faster wholesale asset growth show where Forward30 is gaining traction, but the improvement in recurring operating earnings remains limited.