PETALING JAYA: CIMB Group Holdings Bhd will continue to bank on its stringent cost optimisation as it navigates through the lingering uncertainties in the economic recovery.Chief executive officer Datuk Abdul Rahman Ahmad said this will remain a core focus for the group to further improve productivity and efficiency.
“Our underlying business proved resilient in 2020 and we are building on our momentum in 2021 as the first full year under Forward23+ Strategic Plan.
“The group will continue to drive strategic core programmes including capital optimisation, cost management and portfolio reshaping initiatives, among others.
“We are also making focused investments in key segments that offer strong opportunities for profitable growth, such as wealth management, treasury and markets, transaction banking and intra-Asean wholesale banking, ” he said in a statement after the CIMB Group’s 64th annual general meeting (AGM) yesterday, adding that they have started to make headway and are confident that they are on track to deliver on its ambition to become the leading focused Asean bank.
Abdul Rahman said CIMB Group anticipated better performance across most segments and markets, with optimism fueled by a vaccine-driven economic recovery.
While the group remained cognisant that the pace and extent of recovery remained both uncertain and uneven, it will continue to monitor asset quality and maintain a prudent approach to credit underwriting to achieve the right balance between profitability and growth.
“Digitalisation, both within the bank and for our customers, remains a key priority.
“We will continue to invest in and enhance our technology and digital platforms to increase productivity and improve customer experience, reflecting the accelerated shift towards digital banking over the past year, ” he said.
CIMB Group posted a revenue of RM17.19bil for the financial year 2020 and although this was only a 3.41% reduction from 2019, the group’s net profit came in 73.8% lower at RM1.19bil, mainly due to elevated loan provisions, provisions against Covid-19 related and legacy accounts and kitchen sinking.
These were cushioned by the group’s aggressive cost reductions which came up to 5.5%, exceeding its 5% target.
This led its expenses to be slashed by RM524mil last year and an improved cost-to-income ratio (CIR) of 52.2%, down 1.2% year-on-year (y-o-y).
It’s topline resilience, cost discipline and proactive measures to protect asset quality enabled the group to strengthen its financial position and ensure it remains well-capitalised against shocks, leading to its highest ever CET1 ratio of 13.3%.
This allowed CIMB Group to declare a proposed annual dividend of 4.81 sen per share for 2020, amounting to a total payout of RM477mil and a payout ratio of 40% in line with its dividend policy.
Group chairman Datuk Mohd Nasir Ahmad said the past year was a litmus test for CIMB Group’s ability to remain true to its purpose of advancing customers and society towards a better tomorrow, providing them with opportunities to reinforce the trust placed by the stakeholders in them.
“Throughout the region, we stood by our customers and assured them of unhindered access to financial support and services as people and businesses grappled with the wide-ranging impact of Covid-19 on their lives and livelihoods.
“Backed by a sound institutional framework, the group remained resilient in terms of having a strong capital position and healthy liquidity ratio notwithstanding market volatility and disruptions brought about by the pandemic.
“Guided by our recalibrated strategy known as Forward23+, we are now focused on accelerating growth in tandem with economic recovery, ” he said, adding that the board will continue to provide guidance and oversight over the group’s strategic imperatives to deliver sustainable financial returns and ultimately create consistent value for all stakeholders.
Mohd Nasir also stressed that the group will continue to strengthen its sustainability agenda as the pandemic has also shown that sustainability and resilience are a necessity for all businesses.
“CIMB Group is proud to be the first banking group in Malaysia and one of the first in Asean to adopt a Coal Sector Guide, where it commits to phase out coal financing from its portfolio by 2040, ” he said.
A banking analyst said he was looking forward to seeing CIMB reaping the benefits of its Forward23+ strategy.
“It may be the worst performing bank in 2020 but its provisions, strict cost controls and its forward looking plans have placed it on much stronger footing in 2021.
“We are optimistic about CIMB Group’s prospects this year and we may even see it outperforming most of its peers, ” he said.
CIMB Group added two sen to RM4.30 yesterday with 4.08 million shares traded.