PETALING JAYA: While CIMB Group Holdings Bhd
may continue to face headwinds in multiple geographies, its high dividend yields bolstered by special dividends, an ongoing turnaround in the Thailand region and solid non-interest income (NOII) prospects still make it an attractive pick.
MBSB Research said in a report that the lender has shown convincing NOII expansion thus far, with their cross-selling capability slowly netting growth.
It also said “superb cost control” is seen in financial year ending Dec 31, 2026 (FY26) with further cost take outs expected, although on a smaller scale.
The research house said it was relatively neutral on the lender’s net interest margin (NIM) prospects, although the first quarter of FY26 (1Q26) faces a slight contraction, plus the group should continue to benefit from the overnight policy rate cut as pricier fixed deposits (FDs) expire.
An analyst told StarBiz that he concurs on this even as banks will benefit from incoming lower FD rates.
“In theory, this is good for the banks but other challenges continue to abound,” he said.
According to MBSB Research, when it comes to the war in the Middle East, it reckons there is no major impact on asset quality yet, but potential concerns exist.
It noted that the group had minimal direct exposure to the Middle East and it will be tightening its risk appetite and underwriting standards regardless.
Maintaining its “buy” call on the stock, it said despite headwinds, there is good progress in the lender’s Thailand segment.
Management is confident in its ongoing restructuring, with this quarter seeing significant progress made in the pivot.
Loan growth has already accelerated throughout FY25 and the focus now is on capital reallocation, which should lead to return on equity expansion in this segment once again, it said.
Hong Leong Investment Bank (HLIB) Research in its report said CIMB maintains a defensive posture with stable asset quality and potential reallocation of unutilised overlays as legacy provisions expire.
“Asset risks are contained via prior de-risking in Indonesia and Thailand,” it added.
The research house noted NIM remains resilient, supported by disciplined deposit pricing and affluent-driven liquidity while healthy wealth momentum and controlled credit costs underpin earnings stability amid macroeconomic headwinds.
“Post-FY25 housekeeping, we recalibrate our FY26/FY27 earnings forecasts downwards by 0.9%/1.2% and introduce FY28 estimates,” HLIB Research said.
It maintains its “buy” call with a lower target price of RM9.80.
At last look, the stock was trading at RM7.80.
HLIB Research said the lender’s NIM outlook remains stable in the near term, supported by a structurally deposit-led strategy that continues to anchor funding strength.
It also said with pricey deposits gradually fading away in 1Q26, CIMB’s management highlighted that a better NIM recovery could be on the horizon barring any unforeseen uncertainties.
Concurrently, the system liquidity and margin resilience will be supported by affluent and high-net-worth segment, partially offsetting potential pressure from weaker balances at the lower end of the income spectrum, it said.
Furthermore, the group’s wealth management arm delivered encouraging momentum in the first quarter, driven by structured products and strong bancassurance performance in Singapore, with regional flows (Malaysia and Thailand) also holding up.
All in, the FY26 loan growth target of 5% to 7% with a return on equity guidance of 11% to 11.5% are expected to stay firm, the research house added.
