CIMB Group expects to grow its Singapore business, tapping its hub role in Asean, says CEO

Straits Times

9 hours ago

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- Malaysian lender CIMB Group anticipates growth in its Singapore operations in the coming years, said its chief executive, citing the city-state's status as a wealth and treasury hub in Asean.
Singapore accounted for 14 per cent of the banking group's profit before tax in the first quarter of 2025, up from 11 per cent in the same period a year earlier.
Speaking at a media briefing on July 21 at CIMB's headquarters in Kuala Lumpur , group CEO Novan Amirudin said: 'We envisage this percentage to grow over the next five, six years because of the role that Singapore plays today within the Asean market. It's clearly been a very successful wealth centre and we have also been beneficiaries of that.'
'Singapore has also been an established treasury centre. A lot of multinational companies or regional companies are using Singapore as their hub to manage treasuries,' he said, adding that the bank sees the Republic as an important wealth and treasury hub to connect the wider Asean business.
CIMB is Malaysia's second-largest lender and South-east Asia's fifth-largest banking group by assets.
Mr Amirudin said the bank has been very active in the Singapore market, catering to a range of clients, from individual consumers in retail banking to large corporations in corporate banking.
He noted that CIMB needs to find its niche in each market, such as selling to certain segments and sharpening its focus, rather than trying to be a more universal player.
Mr Victor Lee, who is CEO of CIMB Singapore and oversees growth markets Thailand and Cambodia, said CIMB's strategy in the Singapore market is to be a niche, challenger bank.
'We don't bank with every segment of the population, but in the niches we choose to play in,' he said.
For instance, the bank said it makes it easier for Malaysians living in Singapore to remit money home by offering attractive exchange rates. Between 2020 and 2024, it saw a sixfold increase in Singapore dollar-Malaysia ringgit transaction volumes and threefold growth in its Malaysian customer base in Singapore.
Bancassurance partnerships – where an insurer sells its products to a bank's customers – have also been a key part of its growth strategy, particularly in expanding its consumer and commercial banking segments.
The bank offers customers the option to choose from seven leading insurance partners, ensuring they meet their unique needs and goals.
'This is especially important for our affluent clients who are focused on wealth preservation and legacy planning,' Mr Lee said.
He added that the Singapore business is seeing strong momentum in personal loans and financing for small- and medium-sized enterprises (SMEs), driven by targeted propositions and competitive offerings.
Consumer loans for Singapore grew 3.7 per cent year on year in the first quarter of 2025.
CIMB saw that existing frameworks for sustainability-linked financing were often too complex or costly due to carbon accounting and verification. As a result, it responded with an SME sustainability-linked loan and financing programme in 2024 that makes the enrolment process fully digital and simplified.
The bank further seeks to support firms, especially data centre players, that are expanding in the Johor-Singapore Special Economic Zone (JS-SEZ) with banking and advisory solutions.
'The largest sector that has been receiving a lot of foreign direct investment and a lot of mentions is the data centres. So we, as a large player, have also been announcing a lot of... data centre deals,' Mr Amirudin said.
In April, CIMB announced RM10 billion (S$3.04 billion) financing to drive economic integration and capture cross-border opportunities in the JS-SEZ.
The Johor Bahru-Singapore Rapid Transit System Link, set to be completed by the end of 2026, is expected to significantly boost the movement of people on both sides of the border. This increased connectivity will likely spur substantial development in real estate and surrounding businesses in the areas, he added.
The bank has been responding to challenges posed by economic uncertainties.
Mr Amirudin said the lender has built a moat from non-interest income businesses, even as central banks in Asia cut interest rates and net interest margins (NIMs) have been declining.
Banks may see their NIMs squeezed when interest rates are low or falling, as the difference between what they earn on loans and what they pay on deposits narrows.
He said: ' Thirty per cent of our income comes from non-interest income. It comes from fees, it comes from FX, it comes from payments, it comes from advisory fees. And this is an area that CIMB has been extremely active in and forms a critical part of our Forward30 plan to increase our proportion of income that comes from non-interest income.'
Forward30 is a six-year road map launched in March to accelerate growth and future-proof the organisation.
'So despite a potential decline in interest income, an increase in non-interest income could mitigate some of that.'
The bank has further taken steps to strengthen its financial position, such as reducing its risk profile and credit losses, said Mr Amirudin.
'We have reconstituted our portfolio over the last few years. We've exited businesses that were very hard to operate. We've reduced our risk profile, we've reduced our credit losses, we've increased our coverage ratio.'
'We are in a good place and that would be one more area that can help the financial statement,' he said.
In the first quarter, CIMB reported a low proportion of loans at risk, with less than 3 per cent of its total loan book tied to trade and limited direct exposure to the US market, with less than 0.4 per cent of its customers deriving more than 20 per cent of their revenue from the US.