CIMB targets loan growth of between 5% and 7% in 2024
KUALA LUMPUR: CIMB Group Holdings Bhd has targeted total loan growth of between five and seven per cent, a return on equity (ROE) of between 11.0 and 11.5 per cent, a cost-to-income ratio (CIR) of below 46.9 per cent and loan loss coverage of between 30 and 40 basis points in 2024.

In its Annual Report 2023 filed with Bursa Malaysia today, the bank said it expects to maintain its Common Equity Tier-1 (CET1) ratio at or above 13.5 per cent and maintain the dividend payout ratio of between 40 and 60 per cent, with a guidance of 55 per cent.

It said the ROE and CIR guidance will likely fall short of the Forward23+ targets originally set in 2020 (ROE of 11.5-12.5 per cent and CIR of equal or less than 45 per cent) largely due to the higher accumulated capital as well as the negative impact on net interest income from compressed net interest margin (NIM) arising from the challenging cost of deposit environment.

"We aim to navigate this more efficiently in 2024 and have put in place plans to prioritise NIM and capital management.

"With this, we believe the group has created a solid platform under the Forward23+ strategy to further propel CIMB to greater heights and we look forward to achieving it together with you, our esteemed stakeholders,” it said.

CIMB said it approached 2024 with cautious optimism backed by sound strategies and plans to overcome or manage the many external challenges, which should translate to a better financial performance for 2024.

It said that domestic and regional economies remain resilient as inflationary pressure eases, consumption and investments improve, and global trade recovers.

"Nonetheless, we expect uncertainties to abound through 2024, with geopolitical tensions remaining high and exacerbated by the uncertainties about the interest rate outlook and the ripple effects from the economic slowdown in China.

"We continue to keep a close watch on these economic risks as we navigate our businesses guided by the Group’s strategies,” it said.

Meanwhile, CIMB said that going into the final 12 months of the five-year Forward23+ strategic plan, the bank is resolute in its efforts towards achieving the end-2024 ambitions and targets.

"We remain steadfast in executing the strategies and initiatives, specifically in growing within our targeted segments, tightening credit risk management and maintaining strict cost controls.

"Efforts will continue to be put into lowering impaired loans and maintaining a high level of loan loss coverage via prudent risk management and asset quality monitoring,” it added.

CIMB said with expectations of the NIM environment remaining challenging, the group intends to emphasise NIM and balance sheet management as well as continuing to strengthen its current account savings account (CASA) and deposit franchise.

"In these times of escalating costs, we are watchful of our operating expenses without sacrificing much-needed investments to improve our technological and operational resiliency and digital capabilities,” it said. - Bernama
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