KUALA LUMPUR: CIMB Group Holdings Bhd is targeting 5-7% loan growth in 2025, marking a stronger pace compared to the previous year.
The banking group’s loan growth will be largely fuelled by Indonesia, where growth is projected within the same 5-7% range. Malaysia is also expected to gain momentum, with loan growth estimated at 5-6%.
Additionally, CIMB Group’s Thailand and Singapore operations are showing signs of acceleration, further supporting the group’s positive outlook for 2025.
Group CEO Novan Amirudin said enhancing operations in Thailand remains a key focus for the group, adding that a sharper approach to client segmentation is essential to better serve the right banking clients.
“Despite challenges, the group remains fully committed to Thailand, as it plays a crucial role in completing its Asean network, particularly in wholesale banking. Many Thai corporates are actively expanding across Southeast Asia, with significant investments in Malaysia, Singapore, and Indonesia, and the group continues to support them across these markets.
“Thailand is more than just a local market. It is a strategic part of the group’s regional presence. However, improving operational efficiency remains a priority to achieve better outcomes in the country,” he told reporters at CIMB Group’s FY24 financial results briefing on Friday.
Novan noted that Thailand’s economic growth remains sluggish, with gross domestic product expanding by only 1-2%, both last year and in current forecasts. He said several factors contribute to this slow momentum.
“One key issue is the lack of a major investment cycle in recent years. Previously, Thailand saw significant investments in the automotive and petrochemical sectors, but these industries now face mounting challenges.
“For instance, the US tariffs on Chinese EVs have forced excess supply into Southeast Asia, indirectly affecting Thailand’s auto sector. Meanwhile, tourism, a crucial driver of the Thai economy, has shown signs of recovery. However, visitor numbers have yet to return to pre-pandemic highs.
“Given these factors, Thailand remains a difficult market, facing structural headwinds that continue to weigh on its economic outlook,” he said.
CIMB Group achieved a strong financial performance with net profit of RM7.73 billion, up 10.7% for the financial year ended Dec 31, 2024 (FY24), compared to RM6.98 billion in FY23. Profit before tax increased 9% YoY to RM10.4 billion, translating to earnings per share of 72.3 sen.
The results led to a significant improvement in return on average equity to 11.2%, up 50bps YoY.
Further, CIMB Group’s FY24 operating income rose 6.1% YoY to RM22.3 billion, contributed by growth in net interest income (NII) and non-interest income (NOII).
NII was up 5.3% YoY to RM15.40 billion, driven by healthy loan growth, while NOII grew 8.1% YoY to RM6.90 billion driven by strong client franchise business and trading income, improving NOII ratio to 31.0%, up 60bps YoY.
CIMB Group proposed a second interim dividend of 20 sen per share, bringing the total proposed annual dividend to 47 sen per share. This translates to a record total dividend payout of RM5.04 billion.
CIMB Group’s total gross loans saw a solid 4.8% YoY growth, aligning with market trends.
As part of its deposit-led strategy, total deposits increased by 5.2% YoY, while current account savings account (CASA) balances rose by 7.7% YoY, bringing the CASA ratio to 43.1% as of December 2024.
“Moving into 2025, CIMB Group will remain cautious in our outlook and be vigilant in navigating external and geopolitical uncertainties.
“While challenges persist, we expect resilience across our Asean markets where we operate and anticipate our core financial performance to continue on a positive trajectory, in tandem with profitability prioritisation without compromising investments and resiliency,” Novan said.
