CIMB-Best Quarterly Results Thus Far

CIMB has forecast that 2H results of 2010 will be as good as the first half.

CIMB -the country's second largest banking group,posted a record quarterly net profit in the April-June period and is positive on its prospects for the rest of the year.

Net profit in the second quarter was RM889 million, up 34 per cent from a year ago and 6.1 per cent higher than the first quarter's.

Its first half net profit rose 35 per cent to RM1.7 billion, driven by a strong rebound in corporate and investment banking, stronger contribution from its Indonesian unit and a drop in loan loss provision.

"This is our highest-ever three-month and six-month performance. We are positive on the outlook for the second half as there is a strong capital market deal pipeline and consumer growth momentum," group chief executive Nazir Razak told reporters at a results briefing late yesterday.

Analysts expect it to turn in a net profit of RM3.5 billion for the full year.

The group raised its return on equity target for the full year to 16.5 per cent from 16 per cent before. It kept the loan growth target at 12 per cent. Loans increased 11 per cent last year.

The group called off plans to sell a majority stake in its Southeast Asia Special Asset Management Bhd unit, in which it had lumped about RM8.4 billion worth of legacy bad loans.

It would not be "economically sensible" to divest the stake now under the new Basel II risk-based capital adequacy framework, Nazir said.

"With Basel II, that business is actually a lot more valuable to us from a capital and economic standpoint than we thought before," he remarked.

Nazir said CIMB Group will remain conservative in its capital position as it is still in the midst of migrating to the new framework.

Its Indonesian unit, PT Bank CIMB Niaga, was the largest contributor to the group's earnings. It accounted for 36 per cent of the group's profit before tax of RM2.3 billion for the half-year, compared with 18 per cent a year earlier.

CIMB Thai, which returned to profitability in that period, accounted for 1 per cent of the group's pre-tax profit. The Malaysian consumer bank's contribution to group pre-tax profit was slightly lower at 14 per cent, compared with 15 per cent before.

Corporate and investment banking's profit before tax rose about 73 per cent to RM498 million as regional capital markets in the first half were significantly better than a year earlier.

Well, there are many new price forecast. Many say it may breach RM8.30 if market is amenable. 

Stingy Genting Hits the Profit Jackpot

Genting Bhd posted a whopping 244.6% jump in net profit for its second quarter ended June 30 to RM739.2mil compared with RM214.5mil in the same quarter a year ago.

Revenue stood at RM4.1bil compared with RM2.1bil previously.

Genting said in a statement that the increase came mainly from its leisure and hospitality division following the commencement of Resorts World Sentosa (RWS) in Singapore.

It said the improved revenue from RWS was largely due to better luck in the premium players business, which also contributed to improved profit.

Genting said its casino in Britain benefited from an increase in business volume but the weaker pound sterling translated into lower casino revenue in ringgit terms.

It said revenue and profit from Genting Plantations Bhd was higher in the quarter as a result of better palm product prices and improved fresh fruit bunches production.

However, its power energy division Genting Energy Ltd recorded a lower revenue due to lesser generation of electricity by its Meizhou Wan plant in China.

Genting’s oil and gas division also posted a drop in revenue and profit due to lower share of entitlement in China.

The company said, overall, its better performance in the quarter was due to share of results in jointly controlled entities and associates.

For the six months ended June 30, Genting posted a 124% increase in net profit to RM971.6mil compared with RM427.6mil in the corresponding period a year ago.

Revenue jumped 71.4% to RM7.2bil from RM4.2bil before.

The company said it was cautiously optimistic about its prospects as regional competition continues.

“While business has been resilient, the management will continue to closely monitor the competitive environment and intensify its plans to meet growing competition.”

Genting also said that with the opening of Marina Bay Sands, RWS’s business had showed resilience and its business model had displayed impressive strength.

“RWS continues to be optimistic with its business model for the rest of the year,” it said.

It added that the resort hosted a series of high-profile entertainment events and promotions and would continue to fill the rest of its year-long calendar with activities to encourage fresh and repeat visitations.

It said RWS would continue to improve its attractions, facilities and infrastructure to meet guest expectations. Construction of the West Zone has started and it is expected to commence operations next year.

Genting also said the performance of its power division was expected to be impacted by the Meizhou Wan plant, which was experiencing lower-than-expected tariff increases and reduced generation hours.

The performance of its plantation division remains satisfactory.

Genting has declared a gross interim dividend of 3.3 sen per ordinary share of 10 sen each, less 25% tax, for the first half of 2010. [As usual, no special dividends from this stingy stooge!]

This represents a 10% increase compared with 3 sen per ordinary share of 10 sen each, less 25% tax, in the first half of last year.