* Q4 profit at 854.4 mln ringgit vs 825.7 mln year-ago
* Says continues to focus on bringing down costs
* Cost-to-income ratio drops to 53.9 pct at end of Dec
(Recasts with outlook, adds loan growth, share price)
By Sumeet Chatterjee
HONG KONG, Feb 28 Malaysian lender CIMB Group
Holdings Bhd on Tuesday beat expectations with a 3.5
percent rise in fourth-quarter profit and said it was optimistic
about business prospects in 2017, based on improved loan growth
and lower costs.
The net profit in the December quarter at CIMB, the
second-largest lender by assets in Malaysia, was bolstered by an
8.7 percent increase in credit demand in its home market as well
as in neighbouring Indonesia and Thailand.
Malaysian lenders including Malayan Banking Bhd (Maybank)
, the country's largest lender by assets, and CIMB have
benefited from cost cutting and stronger demand for corporate
loans in the domestic market.
CIMB's net profit for the quarter ended in December 2016 was
854.4 million ringgit ($192.21 million), up from 825.7 million
ringgit a year earlier and beating analysts' average estimate of
805 million ringgit according to Thomson Reuters data.
Maybank last week reported a 43 percent rise in
fourth-quarter profit on loan growth and a rise in investment
income, and forecast stronger loan growth in its core markets of
Malaysia and Indonesia.
Malaysian lenders' earnings prospects for the current year
have been aided by the country's improved economic outlook after
being hobbled over the past couple of years by slumping oil and
gas prices and slowing demand from top trade partner China.
A financial and political scandal at state-fund 1Malaysia
Development Berhad (1MDB) has also dented sentiment.
Malaysia's economy grew 4.5 percent in the fourth quarter
from a year earlier, ending a year of tepid growth on a stronger
note helped by solid exports and resilient domestic demand.
"The group is optimistic for 2017 on the back of sustainable
loan growth, continued cost controls and expected improvement in
provisions," CIMB said in its earnings statement filed with the
It posted an 11.1 percent rise in bad loans provisions last
year from 2015.
The bank's cost-to-income ratio improved to 53.9 percent in
2016, down from 55.6 percent in the year-ago period, bringing it
closer to its target of 50 percent by end of next year.
CIMB said in December it had agreed to sell its 18.2 percent
stake in China's Bank of Yingkou Co Ltd, valued at 972 million
ringgit, to investment holding company Shanghai Guozhijie
Investment Development Co. Ltd.
CIMB shares were trading 0.6 percent higher in the
afternoon, in a slightly weaker broader market.
($1 = 4.4430 ringgit)
(Reporting by Sumeet Chatterjee; Editing by Stephen Coates)