KUALA LUMPUR (Feb 28): The country’s second-largest lender by assets, CIMB Group Holdings Bhd, is expecting a challenging year in 2020, against the backdrop of slower economic growth and the Covid-19 outbreak.
“I have to be realistic. I think this year will be a challenging year for the industry, coupled now with the Covid-19,” said CIMB Group chief executive officer Tengku Datuk Seri Zafrul Aziz at the group’s financial results briefing for the financial year ended Dec 31, 2019 (FY19) here today.
Zafrul noted that the impact is expected to be small, given the size of the bank’s exposure to sectors that are most impacted by Covid-19 — such as tourism, hospitality and food and beverage (F&B) — is only about 2% to 3% of the bank’s portfolio.
Nonetheless, he said the bank will continue to assess the impact that Covid-19 will have on its outstanding financing and asset quality.
“We have reassured our customers that all cases will be given due consideration, and we will continue to monitor the situation closely to ensure that any impact on our asset quality is contained,” said Zafrul.
Commenting on the stimulus package that was unveiled yesterday, Zafrul noted that the RM20 billion fund “should add about 0.5% [growth] to GDP this year”, said Zafrul, adding that the bank is forecasting a gross domestic product (GDP) growth of 3.6% to 3.7% this year.
“We also continue to expect Bank Negara Malaysia (BNM) to ease monetary conditions and potentially another 25 basis points overnight policy rate (OPR) cut in the second quarter,” he added.
“We, as a bank, have to also play a role in making sure that we assist our customers that are affected across the region,” said Zafrul.
CIMB shares closed four sen or 0.82% lower at RM4.82, valuing the banking group at a price-to-book value of 0.89 times. Its market capitalisation was at RM47.43 billion.