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Business Times
3 days ago
- Business
- Business Times
Instead of being a universal bank across Asean, CIMB wants to have a niche in each market, says group CEO
[KUALA LUMPUR] CIMB wants to find its niche in each of the markets it is in, instead of trying to serve every customer segment across Asean, said group chief executive officer Novan Amirudin. The Malaysian lender positions itself as an Asean-focused bank and has operations in 10 markets globally. As one of the largest banks in Malaysia, it has the scale to serve the full spectrum of customers, but it cannot do this elsewhere. By doubling down on its strengths in its other markets, Novan expects this will help boost the return on equity (ROE) of the bank. 'We're looking at sharpening our focus in (each market) to improve our returns as a niche player, rather than trying to be a more universal player,' he said at the bank's media day on Monday (Jul 21). The event was held at CIMB's headquarters in Kuala Lumpur. For example, Singapore serves as a wealth and treasury hub for the bank to connect to the wider Asean region. A NEWSLETTER FOR YOU Friday, 8.30 am Asean Business Business insights centering on South-east Asia's fast-growing economies. Sign Up Sign Up In Indonesia, Novan is positive on the growth of its Islamic banking business, given that penetration for the segment is low, despite the country having a large Muslim population. Thailand and Cambodia serve as strong centres for its cross-border wholesale segments. 'If you look at Thailand closely, there are very niche players who are so focused on certain segments … and they are making that double-digit ROE,' Novan said. In Vietnam and the Philippines, CIMB operates only as a digital bank, despite holding a full banking licence. In particular, the bank has chosen to partner e-commerce players in the Philippines to scale faster, as expanding organically on its own is 'extremely difficult' due to the large incumbents in the market. Focusing on its strengths in the individual markets can help the bank better allocate its resources to grow, especially in times of uncertainty. 'We operate in all these different jurisdictions based on how we can contribute to customers and societies in that particular market. If we cannot play a meaningful role, then we'd need to find a different angle for us to play a meaningful role,' he said. 'We then need to reallocate that capital somewhere else, where we can generate better returns – and there are many opportunities for us,' he added. This is also part of the lender's six-year growth plan – called Forward30 – that it launched in March, to accelerate growth and future-proof the organisation. The plan has four main strategies: to optimise and reallocate capital, build its deposit franchise to reduce cost of funds, improve cross-selling at the bank, and increase productivity and efficiency. By 2030, CIMB aims to be among the top three in net promoter score, in the top quartile for ROE among its regional peers, to have a current and savings account ratio of 45 per cent, a non-interest income ratio of between 33 and 34 per cent, and a cost-to-income ratio in the low 40 per cent. Tariff uncertainty Novan noted that the bank's strategy would enable it to mitigate some impact from US tariff policies. While the exact impact of the tariffs is still unknown, he expects it will cause economic slowdown, which does not bode well for the bank's loan growth. But focusing on non-interest income can offset the decline in interest income. Becoming more operationally efficient can also reduce costs, and the bank has worked to reduce its risk profile. 'Tariffs are one factor that would impact a company's and a bank's financials, but it's how we then choose to play with the different levers to offset that situation that is the important part,' he said.
Business Times
3 days ago
- Business
- Business Times
Instead of being a universal bank across Asean, CIMB wants to have niche in each market: group CEO
[KUALA LUMPUR] CIMB wants to find its niche in each of the markets it operates in, instead of trying to serve every customer segment across Asean, said group chief executive officer Novan Amirudin. The lender, whose home market is in Malaysia, positions itself as an Asean-focused bank and has operations in 10 markets in the region. As one of the largest banks in Malaysia, it has the scale to serve across the full spectrum of customers, but the same cannot be said elsewhere. By doubling down on its strength in its other markets, Novan expects this will help boost the return on equity (ROE) of the bank. 'We're looking at sharpening our focus in (each market) to improve our returns as a niche player, rather than trying to be a more universal player,' he said at the bank's media day on Monday (Jul 21). The event was held at CIMB's headquarters in Kuala Lumpur. For example, Singapore serves as a wealth and treasury hub for the bank to connect to the wider Asean region. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up In Indonesia, Novan is positive on the growth of its Islamic banking business, given that penetration for the segment is low despite the country having a large Muslim population. Meanwhile, Thailand and Cambodia serve as strong centres for its cross-border wholesale segments. 'If you look at Thailand very closely, there are very niche players who are so focused on certain segments… and they are making that double-digit ROE,' Novan said. As for Vietnam and the Philippines, CIMB operates as digital banks in these two markets despite having a full banking licence. In particular, the bank chose to partner e-commerce players in the Philippines to scale faster, as expanding organically on its own is 'extremely difficult' due to the large incumbents in the market. By focusing on its strengths in the individual markets, this can help the bank better allocate its resources to grow, especially in times of uncertainty. 'We will operate in all these different jurisdictions based on how we can contribute to customers and societies in that particular market. If we cannot play a meaningful role, then we need to find a different angle for us to play a meaningful role,' he said. 'We then need to reallocate that capital somewhere else, where we can generate better returns – and there are many opportunities for us,' he added. This is also part of the lender's six-year growth plan – called Forward30 – that it launched in March, to accelerate growth and future-proof the organisation. The plan has four main strategies: to optimise and reallocate capital, build its deposit franchise to reduce cost of funds, improve cross-selling at the bank, and increase productivity and efficiency. By 2030, CIMB aims to achieve a top three in net promoter score, top quartile ROE among regional peers, current and savings account ratio of 45 per cent, non-interest income ratio of between 33 and 34 per cent, and cost-to-income ratio in the low 40 per cent. Tariff uncertainty Novan noted that the bank's strategy will also help it mitigate some impact from US tariff policies. While the exact impact of the tariffs is still unknown, he expects it will cause economic slowdown, which does not bode well for the bank's loan growth. But focusing on non-interest income can offset the decline in interest income. Becoming more operationally efficient can also reduce costs, and the bank has worked to reduce its risk profile. 'Tariffs are one factor that would impact a company's or bank's financials, but it's how we then choose to play with the different levers to offset that situation that is the important part,' he said.
The Sun
21-04-2025
- Business
- The Sun
CIMB commits RM10b in financing facilities to support growth opportunities in JS-SEZ
PETALING JAYA: CIMB Group Holdings Bhd yesterday announced a landmark commitment of RM10 billion in funding facilities to drive economic integration and unlock cross-border opportunities in the Johor-Singapore Special Economic Zone (JS-SEZ). Leveraging its strong Asean footprint and comprehensive suite of financial solutions, CIMB launched its Asean Financial Passport, offering a one-stop approach to empower businesses with seamless cross-border banking experience, delivering end-to-end support, including local regulatory knowledge expertise across every stage of growth. The group said in a statement that it is strategically positioned to catalyse growth across corporates and small and medium enterprises, while accelerating investment inflows in support of the transformative bilateral initiative. CIMB Group CEO Novan Amirudin said: 'The JS-SEZ represents a transformative move in regional economic collaboration, deepening connectivity and unlocking new avenues for sustainable growth between Malaysia and Singapore while strengthening the region's resilience against global uncertainties. This initiative fosters deeper regional integration by creating a seamless ecosystem for businesses and talent, as well as enabling efficient movement of goods, optimising costs and enhancing production efficiency for businesses. With clear complementary strengths, improved connectivity and highly structured bilateral coordination, we believe that JS-SEZ is set up for success.' As a leading Asean-focused financial institution, he added, they are committed to their purpose of advancing customers and society, by capitalising the immense potential of the JS-SEZ through their integrated cross-border banking solutions, strategic advisory and extensive ecosystem of partnerships, backed by their strong on-ground presence in both Johor and Singapore. In this heightened uncertain environment, Novan said, CIMB is committed to being a source of strength for their clients, as they have always been, in both good and challenging times, to help them navigate this evolving landscape. 'We look forward to collaborating with various stakeholders and clients to deliver meaningful outcomes, while propelling Asean's long-term economic and environmental aspirations.' CIMB has set up a dedicated team comprising 30 experienced bankers in Singapore and Malaysia to accelerate market entry for clients across Malaysia, Indonesia, Singapore, Thailand, mainland China and Hong Kong to capture opportunities arising from JS-SEZ. With its extensive presence in Johor, CIMB currently operates 28 branches, of which six branches have dedicated capabilities and expertise to support growth in JS-SEZ. The bank is also exploring branches around the Johor-Singapore Rapid Transit System Link checkpoints to better serve customers. In addition, CIMB regularly conducts high-impact initiatives including foreign direct investment and domestic direct investment partnerships as well as familiarisation visits to Johor for its clients from Asean. These provide businesses with valuable market intelligence and direct access to key stakeholders, including networking forums that connect investors with relevant stakeholders to encourage meaningful dialogues. Complementing this, the bank also organises targeted seminars on economic and industry outlook; legal; tax and regulatory framework; business set up processes; and financing to equip businesses with practical tools and insights needed to navigate the JS-SEZ effectively. Beyond core banking offerings, the bank provides value-added services such as sustainability advisory and integrated employee payroll solutions through CIMB@WORK, aimed at helping businesses streamline operations whilst meeting emerging environmental, social and governance requirements. These initiatives are part of an ongoing effort by CIMB as a regional growth partner to amplify its advocacy for cross-border business growth.
