Latest news with #CIMBGroupHoldingsBhd
New Straits Times
a day ago
- Business
- New Straits Times
Tariff uncertainties to pose little impact on CIMB's FY2026: Group CEO
KUALA LUMPUR: CIMB Group Holdings Bhd says the prevailing uncertainty surrounding global tariff policies will not have a direct impact on its financial performance for the financial year ending 2026 (FY2026). This will be due to the group's diversified income strategy and sustainable operational efficiency. CIMB Group chief executive officer Novan Amirudin said while global tariffs could potentially weigh on regional economic growth, the impact on the bank remains limited and largely depends on how the additional costs are distributed along the supply chain. "It depends on whether the costs are borne by producers in Asean, consumers in the United States, or absorbed by governments through incentives and supportive policies," he said during a fireside chat held in conjunction with CIMB's Asean Media Day today. He added that if restrictions on exports from China to the United States prompt manufacturers to relocate to Asean, any resulting oversupply could put pressure on local producers. "This situation could slow regional growth and indirectly affect the financial sector, as loan growth is closely tied to economic activity," he explained. Nevertheless, he said CIMB does not rely solely on interest income but has also strengthened its non-interest income streams. "About 30 per cent of the group's income comes from non-interest sources, including transaction fees, foreign exchange, payment solutions and advisory services. "These initiatives are aligned with our Forward 30 strategy, which emphasises revenue stream diversification," he said. On the recent Overnight Policy Rate (OPR) cut by Bank Negara Malaysia, he said the move impacts the lending rates offered to customers. CIMB also adjusted its deposit rates, such as fixed deposits, which are now at lower levels. "A lower OPR typically reduces funding costs. Therefore, the net impact on the bank depends on how much lending and deposit rates are adjusted. "If we are able to reduce deposit rates further, we can still maintain our net interest margins," he said.
Borneo Post
5 days ago
- Business
- Borneo Post
CIMB: Asean must tell better stories to attract global capital
Novan says Asean markets are filled with strong companies and promising ideas but these have not been highlighted effectively on the global stage. KUALA LUMPUR (July 23): Asean companies and economies must do a better job of telling their success stories if the region wants to attract more global capital, said CIMB Group Holdings Bhd (CIMB) chief executive officer Novan Amirudin. He said the region has strong fundamentals such as a young population, a rising middle class, fast gross domestic product (GDP) growth and steady inflows of foreign direct investment. However, these strengths have not been translated into global investor confidence because Asean has not promoted its investment potential well enough, according to Novan. 'We all know the benefits of Asean. But the one thing that Asean hasn't done enough is storytelling. 'There's a lot of investment proposition (in the region). But we haven't been telling enough stories about what is available here,' he said during the bank's Asean Media Day earlier this week at its headquarters. He said Asean markets are filled with strong companies and promising ideas but these have not been highlighted effectively on the global stage. Instead, he said capital continues to flow to the United States where companies are backed by compelling narratives. 'Malaysia has 30 million people and the US has 300 million, about ten times more. But the market cap of the US is 140 times larger than Bursa Malaysia. It just doesn't make sense,' he said. He said the large gap exists because a significant amount of capital is currently parked in the US market. He explained that the size of the US capital market is driven not just by economic strength but by compelling stories that attract long-term investments. Companies there are able to communicate their value, vision and potential that resonate with global investors. Novan noted that the US financial markets currently hold close to US$30 trillion in foreign-owned assets, with about US$6 trillion coming from East Asian governments and economies. He said the current geopolitical climate is pushing some of that capital to look for new destinations. 'We in Asean must make sure we are ready to capture our fair share of that capital,' he added. However, he warned that any story told to the market must be backed by strong delivery. 'The last thing we want is to promote stories we can't execute. That will drive capital away instead of attracting it,' he said.
Borneo Post
6 days ago
- Business
- Borneo Post
CIMB able to weather effects of rising tariffs
While tariffs are an external factor beyond the bank's control, Novan (left) says CIMB has levers in place to cushion potential impacts on its financial performance. KUALA LUMPUR (July 23): CIMB Group Holdings Bhd is confident it can weather the effects of rising tariffs and economic uncertainties through a mix of income diversification, operational efficiency, and risk management, said group chief executive officer Novan Amirudin. He said while tariffs are an external factor beyond the bank's control, it has levers in place to cushion potential impacts on its financial performance. 'We at CIMB 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. 'Our portfolio looks extremely strong and we are in a good place. And that would be one more area that can help our financial statement. 'Tariffs is one factor that would impact a company's or a bank's financials. But it's how we then choose to play with the different levers to offset that situation, and not every company is the same in that regard. 'We will do what it takes to make sure that we are resilient,' he said during the bank's Asean Media Day on Monday (July 21). He acknowledged that rising tariff could hurt economic growth which in turn may affect loan growth but stressed that the bank is not solely dependent on loans for income. 'Around 30 per cent of our income comes from non-interest sources, such as foreign exchange, payments, and advisory fees. This has been a key part of our Forward30 strategy to rebalance income streams,' he said. Novan added that even in a low interest rate environment where net interest margins are narrowing, CIMB is actively improving operational efficiency through tools such as technology and artificial intelligence. 'We are focused on becoming operationally efficient. That reduction in cost can help our bottom line,' he said. He also highlighted that tariff changes often lead to shifts in supply chains, which may affect different sectors in Asean unevenly. 'Some supply chains may move out of China and redirect exports to Asean. This could increase supply in some markets, like cars for example, and affect local players. We have to watch these shifts closely,' he said. He reiterated that tariffs are just one factor and cannot be viewed in isolation. 'There are many other things within our control. We cannot sit back and say because there are tariffs, our financials will get impacted. We will pivot our strategies and manage what we can,' he said. He said the bank will do what it takes to be nimble, to pivot its strategies, to look at its efficiencies, portfolio, credit losses, non-interest income, and cost of funds to mitigate impacts as a result of tariffs. asean CIMB Financing tariffs
Borneo Post
6 days ago
- Business
- Borneo Post
CIMB targets niche approach across Asean markets
Novan says CIMB is taking a disciplined, market-by-market approach by aiming to be a strong niche player instead of pursuing a 'universal player'. KUALA LUMPUR (July 23): CIMB Group Holdings Bhd (CIMB), which operates across ten markets in Asean, is sharpening its regional strategy by strengthening client support, expanding cross-border banking services and accelerating digital transformation to help businesses manage geopolitical risks and global supply chain shifts. To drive this effort, its group CEO Novan Amirudin said the bank is committed to building scale in high-growth markets such as the Philippines, Vietnam, Indonesia and Thailand by tailoring strategies that meet local needs and opportunities. He said CIMB is taking a disciplined, market-by-market approach by aiming to be a strong niche player instead of pursuing a 'universal player'. 'We are driven by our core purpose and value, and our core purpose is all about advancing customers and society. '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. 'We are always meticulously understanding where we can play our role and be dynamic,' he said during the bank's Asean Media Day earlier this week at its headquarters. He cited Malaysia as an example of a market where CIMB serves all customer segments including unbanked communities through its Touch 'n Go platform. In contrast, he said Thailand presents a different dynamic. Although GDP growth has been slower in that region, CIMB Thai continues to support Thai corporates expanding into other Asean markets like Malaysia and Singapore. For CIMB Thai, he said the bank's focus is on enabling outbound investment and facilitating cross-border capital flows. The goal, he said, is to improve returns by remaining a niche player rather than competing with larger banks. Meanwhile, for Philippines, CIMB grew its customer base to eight million, with six million of them acquired through strategic partnerships with e-commerce platforms. He said these partnerships helped the bank reach underserved segments faster than traditional methods would allow and the group is now adopting the same model in Malaysia and Indonesia to grow its reach. Novan added that the bank had started its digital journey in Vietnam and the Philippines about six years ago with one to two per cent of capital allocated to develop digital banks in those markets. 'In Vietnam and Philippines, we learn exactly how to operate and to expand digitally, whether is it digital internal processes, digital ways of reaching out to customers. And we are then implementing it as we digitise the entire CIMB group,' he said. Novan stressed that CIMB is not afraid to pivot its strategy when the market or competition shifts, and is always on the lookout for where it can add value by tailoring strategies for each market rather than using a one-size-fits-all approach. This focus on returns is part of the group's Forward30 strategy where capital is reallocated to areas with stronger growth potential. For example, Novan pointed to Islamic banking in Indonesia and digital opportunities in Malaysia. He said the combination of CIMB's eight million digital users through its CIMB Octo app and 30 million Touch 'n Go users in Malaysia presents untapped potential. 'That is one area that we can look to harness between the bank and the wallet, for example, that we haven't even started. There's a lot more upside in various pockets but we have to focus on the areas where we can win, where we can serve our customers and society better – that is what we are doing,' he said. asean CIMB Financing niche
The Star
22-07-2025
- Business
- The Star
CIMB deepens push in Thailand, Indonesia
KUALA LUMPUR: CIMB Group Holdings Bhd continues to sharpen its focus in Thailand and Indonesia despite economic headwinds, concentrating on cross-border banking in Thailand and scaling up Islamic finance in Indonesia to tap into long-term growth. Group chief executive officer (CEO) Novan Amirudin said while Thailand's domestic growth remains challenging, cross-border activity is on the rise as Thai corporates expand abroad. CIMB, he added, continues to play an active role in facilitating these transactions. 'Thailand is facing a number of economic headwinds, with the last major investment cycle centred around petrochemicals and automotive. It has been a while since the country saw large-scale investments. 'There is also a heavy reliance on tourism and while the numbers in tourism have returned, spending has yet to recover to pre-Covid-19 pandemic levels. 'As an operator in Thailand, CIMB is also feeling the impact of these issues. Nonetheless, Thailand remains a key part of our overall franchise because it completes our Asean proposition,' he said during the Asean Media Day at the bank's headquarters yesterday. Meanwhile, Novan highlighted Islamic banking as a promising area for CIMB's Indonesian arm, noting that although Indonesia has the world's largest Muslim population, Islamic banking penetration remains low at only 8% of the market. In comparison, Malaysia's Islamic banking penetration stands at 50%. 'Where I see CIMB Niaga Syariah playing a key role in the Indonesian market is through the product innovation and the solutions we can bring to Indonesia. 'There are a lot of lessons that we have learned from the Malaysian market, and if we can marry that with the domestic nuances of operating in Indonesia – the different perspectives, cultures, and requirements – we can offer Indonesians a good alternative to the banking products available today. 'I do see that there are a lot of areas for us to play in, given that the penetration is only at 8% and the demand for such services is high,' he said. For the six months ended June 30, 2025, CIMB's Thai banking arm saw a 21.8% year-on-year (y-o-y) decline in net profit to 1.01 billion baht (RM132.45mil). CIMB Thai Bank PCL, a 94.83%-owned subsidiary of CIMB, attributed the softer performance to one-off items, including adjustments in revenue recognition under the effective interest rate methodology and an additional expected credit loss overlay. CIMB Thai president and chief executive officer Wut Thanittiraporn said in a statement that these were 'proactive measures taken to strengthen the bank's financial resilience in the long term, and were not a result of any deterioration in asset quality'. CIMB Thai's consolidated operating income contracted 257.8 million baht or 3.7% on a y-o-y basis. The decline was mainly due to a 13.6% drop in net interest income to 646 million baht, driven primarily by lower interest income on loans. This was partially offset by higher net fee and service income of 30.5 million baht. On a broader outlook, Novan said the bank is 'in a good place' and its portfolio remains 'extremely strong' despite uncertainties from tariffs. When asked if CIMB expects a decline in earnings for financial year 2026, he said the group will 'do what it takes to be nimble, to pivot its strategies by looking at its efficiencies, portfolio, credit losses, non-interest income and cost of funds to mitigate the impact from tariffs. 'Assuming tariffs continue to rise, this will inevitably impact the broader economy through increased costs and shifting supply chains. 'If economic growth slows, loan growth will also slow – and loan growth is one source of income for banks. 'However, it is more complex than that as a bank's interest income comes from loan growth, as well as what it makes from the net interest margins, which in turn are influenced by the financial institution's cost of funds versus its credit spread that is tied to the customer risk profiles it onboards,' Novan said. He added that in a declining interest rate environment, as seen in recent months, interest margins have narrowed, leading to lower interest income. 'However, interest income is not the only income that we make as a bank. About 30% of our income comes from non-interest income, such as fees, foreign exchange, payments, and advisory services. 'This is an area where CIMB has been extremely active and forms a critical part of our Forward 30 plan, where we plan to increase this portion of our income.' Novan also noted that tools like artificial intelligence are being deployed to enhance the bank's efficiency. He pointed out that another key component of the profit and loss statement is credit losses. 'If a bank grows loans very aggressively, takes on a lot of high-risk customers, then its risk of credit losses will be a lot higher. 'At CIMB, we have reconstituted our portfolio over the last few years. 'We have exited businesses that were very hard to operate. > TURN TO PAGE 2 We have reduced our risk profile and credit losses as well as increased our coverage ratio. 'We are in a good place. Tariffs are just one factor that would impact a bank's financials. What is important is how we choose to play with different levers to offset the impact it brings,' he said. Meanwhile, CIMB chief investment officer fixed income Ng Boon Hoa said the bank remains 'neutral' on the Malaysian market because 'the catalysts have been quite lacking'. 'Policy support and foreign direct investment flows have been relatively muted after a strong run last year. 'There is also some lingering uncertainty surrounding tariffs, seeing as Malaysia has not struck a trade deal with the United State. It remains to be seen whether the country can close the deal.' Ng also noted that first-quarter earnings were relatively muted, growing only 1% to 2% compared to last year where the country had an earnings growth of 10%. 'That has not translated well into the equity market, and we do not think it paints a very positive picture moving forward,' he said. Ng added that the wider scope of the sales and service tax has caused 'a bit of concern about higher prices and inflation and also softer consumer demand'. 'The inflection point, however, will probably come from the foreign flows. Foreign holdings are actually quite low in equities in Malaysia. Any pickup will be positive. 'Foreign direct investment – particularly in data centre developments across the Johor-Singapore Special Economic Zone – could provide a lift to Malaysian markets. 'We have a FBM KLCI target of around 1,600, based on a reasonable 14 times price-to-earnings ratio,' he said. CIMB continues to favour high-yielding sectors such as banking, utilities and construction. 'We think they are quite good in terms of valuations,' Ng said. He noted that the ringgit's strength could also play to the benefit of the Malaysian equity markets. 'The Singapore dollar and the ringgit are expected to appreciate against the greenback in the second half of the year. 'Hence, we still like Malaysian and Singaporean bonds, which deserve an allocation of investors' assets as they are considered safe havens, particularly from a currency perspective,' he said.
