KDN PP17686/03/2013 (032117)
CIMB GROUP HOLDINGS BERHAD
DESCRIPTION
Malaysia’s second largest banking group, with complete ASEAN footprint
- 12-Month Target PriceRM8.20
- Current PriceRM6.67
- Expected Return+22.9%
- Previous target priceRM8.20
- MarketMain
- SectorFinancials
- Bursa Code1023
- Bloomberg TickerCIMB MK
- Shariah-compliantNo
SHARE PRICE CHART
Visual chart data unavailable in this format.
- 52 Week Range (RM)6.20 – 8.50
- 3-Month Average Vol (‘000)15,593.2
SHARE PRICE PERFORMANCE
| 1M | 3M | 12M | |
|---|---|---|---|
| Absolute Returns | -1.9 | -2.6 | -13.9 |
| Relative Returns | -2.5 | -5.9 | -14.3 |
KEY STOCK DATA
- Market Capitalisation (RM m)71,732.1
- No. of Shares (m)10,754
MAJOR SHAREHOLDERS
| Shareholder | % |
|---|---|
| Khazanah Nasional | 21.5 |
| EPF | 15.8 |
| Amanah Saham Nasional | 9.9 |
NOII To Remain Strong
CIMB hosted an analyst call where the group provided updates on the upcoming 2QFY25 results, scheduled to be announced on 29th August 2025. Amid headwinds on the macro front, loans growth momentum for wholesale and business banking remains uncertain, while credit demand from the consumer and commercial banking is stable. Nevertheless, we think that CIMB’s 2QFY25 could be supported by strong non-interest income (NOII), due to better trading and FX performance. We believe CIMB’s current valuation is attractive, trading at -2SD of its 5-year average P/B with the recent weakness pricing in impact from OPR cut. We reiterate our Outperform call on CIMB, on attractive dividend yield >6%, and its Forward30 (F30) strategy that should drive NOII growth.
- Loans growth. We understand that credit demand for business and wholesale banking was lacklustre in 2QFY25, as corporates continued to adopt a wait-and-see approach, given the ongoing global economic uncertainties. However, loans growth momentum from the consumer and commercial segments was stable, backed by the existing pipeline, resulting in drawdowns in 2QFY25. Given the intensive competition within the non-retail loans, loans growth is likely moderate, due to CIMB’s disciplined pricing strategy.
- Non-interest income. The NOII growth momentum should continue in 2QFY25, underpinned by stronger FX and trading income given the ongoing market volatility. Looking ahead, we think that the NOII growth momentum will be driven by the group’s cross-selling efforts as highlighted in its F30 strategy.
- OPR cut is likely have minimal impact on NIM. Management indicated that on an annualised basis, a 25bps OPR cut, will have a negative 1-2bps impact on group level NIM. This translates to a potential RM50m-60m impact to the group’s FY25 bottom-line. However, CIMB’s active liability management (lower campaign deposit rates in May) and the SRR cut in May should help to cushion the negative impact from the OPR cut. Singapore NIM should see an uptick on a QoQ basis, due to timing of CASA campaigns and deposit repricing. However, in the longer run the SORA rate movements should have a negative impact on Singapore’s NIM.
- No immediate stress in asset quality. We gather that asset quality remains benign, with no spikes in delinquencies across all operating markets, while direct exposure to trade related exposure loans remains minimal (<3% of loans book). Recall that the group updated its FY25 credit cost guidance to 25-35bps from 30-40bps in 1QFY25, due stable asset quality outlook in Singapore and Indonesia and stronger recoveries.
- Potential upside in dividends. Management did not discount the possibility of special dividends and share buybacks, should loans growth slows and sufficient accumulation in capital. However, this would also be dependent on capital availability and share price valuation. Note that management guided a dividend payout ratio of 55% in FY25.
T 603 2268 3018
F 603 2268 3014
E wong.lingling@publicinvestbank.com.my
KEY FORECAST TABLE
| FYE Dec | 2023A | 2024A | 2025F | 2026F | 2027F | CAGR (%) |
|---|---|---|---|---|---|---|
| Total Income | 21,018.2 | 22,303.9 | 22,869.6 | 24,267.6 | 25,580.1 | 4.7% |
| Operating Profit | 9,561.7 | 10,379.9 | 10,522.9 | 10,862.9 | 11,541.2 | 3.6% |
| Pre-tax Profit | 9,540.7 | 10,395.9 | 10,522.9 | 10,862.9 | 11,541.2 | 3.5% |
| Net Profit | 6,981.0 | 7,728.0 | 7,837.5 | 8,090.7 | 8,595.9 | 3.6% |
| EPS (Sen) | 64.9 | 71.9 | 72.9 | 75.2 | 79.9 | 3.6% |
| P/E (x) | 10.3 | 9.3 | 9.2 | 8.9 | 8.3 | |
| DPS (Sen) | 43.0 | 47.0 | 43.7 | 45.1 | 48.0 | |
| Div. Yield (%) | 6.4% | 7.0% | 6.6% | 6.8% | 7.2% |
KEY FINANCIAL DATA
INCOME STATEMENT DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Operating Income | 21,018.2 | 22,303.9 | 22,869.6 | 24,267.6 | 25,580.1 |
| Gross Operating Profit | 9,561.7 | 10,379.9 | 10,522.9 | 10,862.9 | 11,541.2 |
| Credit Impairment Charge | -1,591.5 | -1,503.8 | -1,723.7 | -2,316.4 | -2,452.2 |
| Net Operating Profit | 9,561.7 | 10,379.9 | 10,522.9 | 10,862.9 | 11,541.2 |
| Other Gains / (Losses) | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Associates | -17.2 | 18.8 | 0.0 | 0.0 | 0.0 |
| Pre-tax Profit | 9,540.7 | 10,395.9 | 10,522.9 | 10,862.9 | 11,541.2 |
| Income Tax | -2,378.6 | -2,476.5 | -2,525.5 | -2,607.1 | -2,769.9 |
| Effective Tax Rate (%) | -0.2 | -0.2 | -0.2 | -0.2 | -0.2 |
| Minorities | -181.1 | -191.3 | -159.9 | -165.1 | -175.4 |
| Net Profit (reported) | 6,981.0 | 7,728.0 | 7,837.5 | 8,090.7 | 8,595.9 |
| Growth | |||||
| Operating Income | 6.0% | 6.1% | 2.5% | 6.1% | 5.4% |
| Gross Operating Profit | 15.0% | 8.6% | 1.4% | 3.2% | 6.2% |
| Net Profit | 26.0% | 10.7% | 1.4% | 3.2% | 6.2% |
BALANCE SHEET DATA
| FYE Dec (RM m) | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Customer Loans (net of provisions) | 429,450.0 | 442,163.5 | 465,627.3 | 488,908.6 | 513,354.1 |
| Trading and Investment Assets | 198,844.4 | 210,621.2 | 221,152.3 | 232,209.9 | 243,820.4 |
| Goodwill and Intangible Assets | 8,390.9 | 8,297.3 | 8,297.3 | 8,297.3 | 8,297.3 |
| Other Assets | 96,886.8 | 94,048.6 | 97,075.4 | 109,620.6 | 122,904.4 |
| Total Assets | 733,572.2 | 755,130.7 | 792,152.3 | 839,036.5 | 888,376.2 |
| Customer Deposits | 482,426.2 | 496,394.2 | 521,213.9 | 547,274.6 | 574,638.3 |
| Interest-bearing Debt | 33,753.7 | 37,273.8 | 37,273.8 | 37,273.8 | 37,273.8 |
| Other Liabilities | 146,241.4 | 149,228.7 | 155,724.7 | 170,788.2 | 186,574.1 |
| Minority Interests | 1,311.9 | 1,395.1 | 1,395.1 | 1,395.1 | 1,395.1 |
| Total Liabilities | 663,733.3 | 684,291.8 | 715,607.5 | 756,731.7 | 799,881.3 |
| Shareholders’ Equity | 69,838.9 | 70,838.9 | 76,544.8 | 82,304.9 | 88,494.9 |
| Total Equity and Liabilities | 733,572.2 | 755,130.7 | 792,152.3 | 839,036.5 | 888,376.2 |
PER SHARE DATA & RATIOS
| FYE Dec | 2023A | 2024A | 2025F | 2026F | 2027F |
|---|---|---|---|---|---|
| Book Value Per Share | 6.50 | 6.59 | 7.12 | 7.65 | 8.23 |
| NTA Per Share | 5.72 | 5.82 | 6.35 | 6.88 | 7.46 |
| EPS (Sen) | 64.9 | 71.9 | 72.9 | 75.2 | 79.9 |
| DPS (Sen) | 43.0 | 47.0 | 43.7 | 45.1 | 48.0 |
| Payout Ratio (%) | 66.2% | 65.4% | 60.0% | 60.0% | 60.0% |
| ROA (%) | 1.0% | 1.0% | 1.0% | 1.0% | 1.0% |
| ROE (%) | 10.5% | 11.1% | 10.5% | 10.1% | 10.0% |
RATING CLASSIFICATION
DISCLAIMER
This document has been prepared solely for information and private circulation only. It is for distribution under such circumstances as may be permitted by applicable law. The information contained herein is prepared from data and sources believed to be reliable at the time of issue of this document. The views/opinions expressed herein are subject to change without notice and solely reflects the personal views of the analyst(s) acting in his/her capacity as employee of Public Investment Bank Berhad (“PIVB”). PIVB does not make any guarantee, representations or warranty neither expressed or implied nor accepts any responsibility or liability as to its fairness liability adequacy, completeness or correctness of any such information and opinion contained herein. No reliance upon such statement or usage by the addressee/anyone shall give rise to any claim/liability for loss of damage against PIVB, Public Bank Berhad, its affiliates and related companies, directors, officers, connected persons/employees, associates or agents.
This document is not and should not be construed or considered as an offer, recommendation, invitation or a solicitation of an offer to purchase or subscribe or sell any securities, related investments or financial instruments. Any recommendation in this document does not have regards to the specific investment objectives, financial situation, risk profile and particular needs of any specific persons who receive it. We encourage the addressee of this document to independently evaluate the merits of the information contained herein, consider their own investment objectives, financial situation, particular needs, risks and legal profiles, seek the advice of their, amongst others, tax, accounting, legal, business professionals and financial advisers before participating in any transaction in respect of any of the securities of the company(ies) covered in this document.
PIVB, Public Bank Berhad, our affiliates and related companies, directors, officers, connected persons/employees, associates or agents may own or have positions in the securities of the company(ies) covered in this document or any securities related thereto and may from time to time add or dispose of, or may be materially interested in, any such securities. Further PIVB, Public Bank Berhad, our affiliates and related companies, associates or agents do and/or seek to do business with the company(ies) covered in this document and may from time to time act as market maker or have assumed an underwriting commitment in the securities of such company(ies), may sell them or buy them from customers on a principal basis, may have or intend to accommodate credit facilities or other banking services and may also perform or seek to perform investment banking, advisory or underwriting services for or relating to such company(ies) as well as solicit such investment advisory or other services from any entity mentioned in this document. The analyst(s) and associate analyst(s) principally responsible for the preparation of this document may participate in the solicitation of businesses described aforesaid and would receive compensation based upon various factors, including the quality of research, investor client feedback, stock pickings and performance of his/her recommendation and competitive factors. The analyst(s) and associate analyst(s) may also receive compensation or benefit (including gift and company/issuer-sponsored and paid trips in line with the Bank’s policies) in executing his/her duties. Hence, the addressee or any persons reviewing this document should be aware of the foregoing, amongst others, may give rise to real or potential conflicts of interest.
PUBLIC INVESTMENT BANK BERHAD (20027-W)
26th Floor, Menara Public Bank 2
78, Jalan Raja Chulan
50200 Kuala Lumpur
T 603 2268 3000
F 603 2268 3014
