CIMB’s wealth management earnings faced a hit from market turmoil in the first quarter.

Malaysian bank CIMB, Southeast Asia’s fifth largest bank by assets, reported Tuesday its wealth management earnings dropped in the first quarter, hurt by a combination of a strong quarter a year earlier and sharp drops in markets.

Markets globally faced volatility over the January-to-March period, hurt by a combination of Russia’s invasion of Ukraine, supply-chain disruptions, higher inflation and higher interest rates.

Wealth Management Decline

CIMB said the group consumer banking division’s non-interest income (NOII) dropped 8 percent in the first quarter compared with the year-earlier period, in part on strong wealth management income in the first quarter of 2021. Overall, the division’s profit before tax was still up 17 percent in the first quarter compared with the year-earlier period, on loan growth and higher fee income, Malaysia's second-largest bank by assets after Maybank said.

In wholesale banking, NOII for the January-to-March period fell 8.5 percent from the year-earlier quarter, on «exceptionally strong» trading income in the year-ago period, CIMB said.

The CIMB digital assets and group funding division, which handles partnerships across business lines, reported its NOII for the quarter was down 56.7 percent from the year-ago period on lower realised gains in the fixed income portfolio as bond yields rose. Bond yields move inversely to prices.

«Strong Performance»

Overall, CIMB said its core net profit for the first quarter, which excludes all one-off and exceptional items, rose 16 percent from the year-ago period to MYR1.55 billion (US$353.64 million). Including one-off items, first quarter net profit dropped around 42 percent from the year-ago quarter to MYR1.43 billion.

Abdul Rahman Ahmad, the bank’s CEO, said the performance was strong, despite a challenging investment environment.

«We hope to see further recovery in economic activities as the countries we operate in continue to open their economies and relax Covid-19 measures as they transition to endemicity,» Abdul Rahman said in the statement. «However, we also remain cautious on the heightened risk of slower economic growth arising from the impact of inflationary pressures and geopolitical uncertainties.»

The bank had total assets of MYR621.9 billion at the end of 2021, according to its annual report.