TA Research is maintaining its forecasts ahead of CIMB’s upcoming 3Q25 results.
PETALING JAYA: CIMB Group Holdings Bhd
is expected to deliver a decent third quarter ended Sept 30, 2025 (3Q25) performance, supported by resilient non-interest income and stable asset quality.
However, some downside pressure may arise from net interest margin compression and softer loan growth, said TA Research.
Cost discipline remains evident as management continues to execute tactical cost-optimisation initiatives, particularly in managing establishment and technology-related expenses, it added.
The group’s cost-to-income ratio stood at 46.2% in the first half of financial year 2025, reflecting prudent cost control, with operating expenses declining 1.1% on a quarterly basis.
Overall, the cost trajectory for the year is expected to remain contained, although the timing of bonus accruals and other discretionary costs may introduce minor quarter-on-quarter fluctuations in 3Q25 and 4Q25, it said.
At the group level, capital accretion continues to be positive, providing a solid buffer to support business growth and sustain shareholder returns, TA Research told clients.
It is maintaining its forecasts ahead of CIMB’s upcoming 3Q25 results.
The target price for the stock is also maintained at RM8.45 as with its “buy” call on it.
“Our valuation is based on an implied price-to-book of circa 1.17 times based on the Gordon Growth Model and incorporating a 3% environmental, social, and governance premium,” TA Research said.
At last look, CIMB was at RM7.38.
In its report, TA Research also said CIMB observed a slight uptick in impaired loans in 3Q25, though the increase is deemed manageable and not a cause for concern.
The bank continues to closely monitor asset quality and actively engage with affected customers, it noted.
In Malaysia, the modest rise in impaired loans was more pronounced in the auto segment and, to a lesser extent, in mortgages, TA Research said.
“No particular geography or income segment within Malaysia has been identified as a key driver, and management noted it is still too early to determine whether this represents a sustained trend.
“CIMB remains proactive in managing credit costs and write-backs across markets, with flexibility to reallocate provisions as needed.”
The research house said management reiterated its confidence in maintaining full-year credit cost guidance of 25 basis points (bps) to 35 bps, supported by disciplined credit risk management.
While certain areas, such as securities, may experience minor volatility, the overall impact on group profitability is expected to be immaterial, it added.
TA Research said CIMB’s management highlighted that the overall loan pipeline remains healthy and has strengthened in tandem with improving market sentiment, although the impact from these drawdowns has yet to be fully reflected in 3Q25.
Management appears optimistic of stronger loan growth materialising in 4Q25 and extending into 2026, it said.
It also said by segment, non-retail loans, particularly in Malaysia, have been a drag, though the forward pipeline appears encouraging.
“Consumer lending has picked up, led by Indonesia and Singapore, with the latter driven by sustained demand for wealth financing.”
Meanwhile, commercial lending continues to chart a healthy growth trajectory, TA Research said.
It also noted that while management continues to assess the competitive landscape and the full impact of the interest rate cut, seasonal deposit competition heading into 4Q25 is expected to mirror previous years and remain manageable.
