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Malaysian bank CIMB Group profits boosted by one-off gain

KUALA LUMPUR, May 31 (Reuters) - CIMB Group Holdings Bhd on Monday reported a 384% bump in its first-quarter earnings, helped by a one-off gain related to an investment in its e-wallet business, plus higher income.

A third-party investment in TNG Digital, a business jointly founded by CIMB’s wholly-owned subsidiary Touch ‘n Go and China’s Ant Group, led to a revaluation gain of 1.16 billion ringgit ($281.42 million), CIMB, the second largest lender in Malaysia by assets, said in a statement.

CIMB said the third-party investment of approximately 200 million ringgit was from a limited partnership fund managed by a U.S.-based private equity firm which invests in online and mobile payment companies globally. It did not name the firm.

“This investment is part of an ongoing fund raising exercise undertaken by TNG Digital to accelerate its growth and expansion plans,” the bank said, adding that fund raising initiatives would continue this year.

Reuters reported in January that TNG Digital, was in advanced talks with investors to raise at least $150 million.

Touch ‘n Go is the largest shareholder in TNG Digital and is expected to remain so after the exercise. It had said it was looking to close the fund raising round by mid-year.

CIMB’s net profit for the January-March period was 2.46 billion ringgit, up 384% from 507.9 million ringgit a year ago, its stock exchange filing showed.

Analysts polled by Refinitiv had forecast a first-quarter profit of 716.94 million ringgit.

Revenue rose almost 44% to 5.96 billion ringgit.

An increase in income also helped the bank to achieve its higher profit.

Net interest income - a gauge of its underlying financial performance - climbed by 8% to 3.47 billion ringgit, driven by improved net interest margins in Malaysia and Indonesia. Net interest margins measure bank profitability.

Meanwhile, non-interest income rose 43.2% to 1.33 billion ringgit on stronger wealth management and trading income, the bank said.

Lower provisions, which slid 33% due to recoveries in legacy accounts, and the absence of large impairments also helped the bank to improve underlying profitability, it said. ($1 = 4.1220 ringgit) (Reporting by Liz Lee. Editing by Jane Merriman)

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