Latest news with #NovanAmirudin
Borneo Post
8 hours 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
8 hours 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
Independent Singapore
10 hours ago
- Business
- Independent Singapore
CIMB sees Singapore as key growth driver in ASEAN push
SINGAPORE: Malaysian banking giant CIMB Group is preparing for significant growth in Singapore. The city-state plays a key role as a wealth and treasury hub in Southeast Asia. In 1Q 2025, Singapore contributed 14% of the bank's profit before tax, up from 11% the previous year. Group CEO Novan Amirudin believes this trend will continue over the next five to six years. In a media interaction, Amirudin stated: '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 added. CIMB views Singapore as a crucial wealth and treasury centre to connect to its broader ASEAN business. The bank is shifting away from a universal bank approach, with plans to adopt a strategic niche approach for each market it operates in, moving away from a one-size-fits-all model. By focusing on specific market segments, CIMB plans to increase its impact and efficiency. See also Economist says recession will 'certainly hit' Singapore This focused strategy has already resulted in impressive outcomes, including a sixfold increase in Singapore dollar-Malaysia ringgit transactions and substantial growth in its Malaysian customer base in Singapore. Innovation drives CIMB's strategy, particularly in supporting new business sectors. The bank has started offering simple sustainability-linked loans for SMEs, created digital enrolment processes, and is actively supporting expansions in the Johor-Singapore Special Economic Zone. CIMB initiatives in data centre financing stand out, showing the bank's forward-thinking investment plans. Acknowledging how operating as a universal bank is unsuitable for CIMB amid shifts in digitalisation and regional competition, the bank is diversifying its income sources and focusing on niche segments. Nearly 30% of income now comes from non-interest revenue, such as fees, foreign exchange, and advisory services. The bank's regional strategy indicates a clear understanding of different market dynamics. In Singapore, it capitalises on the market's strengths as a wealth and treasury hub. In Indonesia, it is exploring opportunities in Islamic banking. Meanwhile, in Thailand and Cambodia, the focus is on cross-border wholesale segments. This tailored approach helps CIMB maximise its resources and potential in each unique market. To manage economic uncertainties, CIMB has been carefully reducing its risk profile, reducing credit losses, and keeping exposure low to unstable markets. Amirudin explains their philosophy simply: 'We will operate in different jurisdictions based on how we can contribute to customers and societies in that particular market.' By combining strategic focus, new financial solutions, and a solid understanding of local market differences, CIMB Group sees itself navigating the complicated economic environment of Southeast Asia in the near to medium term.
Straits Times
a day ago
- Business
- Straits Times
CIMB Group expects to grow its Singapore business, tapping its hub role in Asean, says CEO
Find out what's new on ST website and app. - 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.
Business Times
a day 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.
