PETALING JAYA: CIMB Group Holdings Bhd
expects its net interest margin (NIM) to hold steady into the fourth quarter of 2025 (4Q25), with the group’s management signalling confidence that recent deposit cost pressures will not derail earnings momentum.
Despite the usual year-end competition for deposits, margins of the second-largest banking group in the country are seen stabilising as funding costs ease and loan deployment accelerates across key markets.
The outlook had set the tone ahead of the lender’s 4Q25 results, due on Feb 27, following its recent pre-results briefing with analysts.
In its note, Hong Leong Investment Bank (HLIB) Research pointed out: “Management remains sanguine regarding NIM stability despite seasonal 4Q25 deposit competition in Malaysia”.
“While retail campaign rates saw a tactical uptick of five basis points (bps) to 10 bps, the impact was mitigated by a rapid normalisation of wholesale funding costs in late 4Q25, resulting in a milder margin squeeze,” the research house added.
HLIB Research said any drag from excess liquidity at year end is expected to be short-lived as a robust pipeline of corporate drawdowns in Malaysia and wealth financing momentum in Singapore would efficiently absorb the surplus.
HLIB Research reiterated its “buy” call on CIMB, with an unchanged target price of RM9.50, citing improving returns and an attractive dividend profile, including special dividends under the RM2bil capital reduction programme.
Similarly positive on CIMB, RHB Research maintained its “buy” call, with a target price of RM9.
It expected CIMB’s earnings to be resilient despite seasonal headwinds.
“For its upcoming 4Q25 results,, our full-year profit after tax and minority interest estimate implies a low to mid-single digit quarter-on-quarter (q-o-q) dip in earnings (amid lower non-interest income and higher operating expenditure, cushioned by lower loan impairments) but year-on-year could be flat,” it said.
“Management remains optimistic of achieving the 12% to 13% return on equity (ROE) target in 2027, supported by the strong performance from Malaysia and Singapore, aided by capital management from its earlier announced RM2bil capital return plan,” it added.
On deposits, RHB Research said competition was largely in line with last year.
“Seasonal deposit competition in Malaysia was similar to the level seen last year,” it said, noting that CIMB picked up some deposit volume in 4Q25 but at similar rates as 4Q24 and benefited from a quicker normalisation in wholesale deposit rates post-year end.
Regionally, while Indonesia’s NIM is expected to soften q-o-q due to one-off uplifts in the previous quarter, repricing of deposits from lower benchmark rates (Singapore and Thailand) should be positive for NIM sequentially.
MBSB Research flagged near-term NIM compression after a strong third quarter.
“After 3Q25’s excellent NIM result, expect compression as Malaysia faces seasonal deposit competition,” it said, adding that non-interest income would normalise after earlier windfalls.
It highlighted “some silver linings”, including stabilising retail promotional rates and improved wholesale deposit volumes, while Singapore and Thailand are expected to see NIM improvements driven by deposit repricing.
