Friday 29 Mar 2024
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KUALA LUMPUR (Oct 20): CIMB Group Holdings Bhd said its Malaysian loan growth is expected to more than offset a slowdown in the financial services provider's other regional markets, RHB Research Institute Sdn Bhd wrote in a note today.

RHB analysts Stephanie Cheah and Fiona Leong said CIMB had told analysts during CIMB's pre-closed period meeting yesterday that CIMB maintained its group loan growth outlook of 7% for current financial year ending Dec 31, 2017 (FY17).

"Challenging loan growth outlook in Thailand and Indonesia operations as competition stiffens and the group continues to exit the less profitable portfolios. However, management expect robust loan growth from its Malaysian operations to more than offset a slowdown in other regions.

"Group NIM (net interest margin) of 2.73% recorded in 2QFY17 is expected to be sustained throughout 2HFY17. While management has seen increasing pressure on asset yields in Indonesia, this is expected to be largely offset by NIM expansion in its Singapore operations. Margins in Malaysia are stable, as competition for deposits has been milder than in past years," Cheah and Leong said.

Hong Leong Investment Bank Bhd analyst Khairul Azizi Kairudin said CIMB painted a "rather mixed loan growth performance across (the) region". According to Khairul, CIMB said its Malaysia loan growth is on course to support the group's 7% loan growth target in FY17.

Khairul said, "We (Hong Leong) believe that (CIMB's) home market Malaysia will provide necessary support cushioning other weaknesses. Indonesia is on course to report further recovery whilst Thailand outlook remains bleak. Management's guidance for a sustainable 40%-60% payout should entice the shareholders moving forward."

 

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