PETALING JAYA: Analysts remain cautious on PT Bank CIMB Niaga Tbk, CIMB Group Holdings Bhd
’s Indonesian subsidiary’s, near-term earnings outlook, with net interest margin (NIM) and credit cost likely to remain the key pressure points.
Hong Leong Investment Bank (HLIB) Research said in a report that system liquidity remains tight amid intense deposit competition, although CIMB Niaga’s own liquidity position remains comfortable with loan to deposit ratio easing to 87.7%.
“Management expects funding pressure to persist through the fourth quarter ending Dec 31, 2026 (4Q26), with potential cost of funds relief only from the second quarter of next year,” the research house said.
It added that while ongoing loan repricing should gradually support asset yields, sticky deposit costs and a greater skew towards lower-yielding corporate loans could cap NIM recovery.
“Meanwhile, management continues to prioritise asset quality over aggressive growth, with corporate lending remaining the key growth engine while consumer expansion stays measured amid softer purchasing power.”
It noted that credit cost is likely to remain elevated towards the upper end of its 1.1% to 1.4% financial year 2026 guidance as management front-loads overlays against emerging consumer stress, particularly within mortgages.
Nevertheless, headline asset quality remains benign, with corporate, commercial and small medium enterprises portfolios holding up well.
“Looking into 2027, earnings could gradually stabilise as funding pressure eases, loan repricing catches up, auto-related provisioning normalises and structural cost savings bear fruit.
“However, the pace of recovery remains dependent on system liquidity and consumer asset quality,” added HLIB Research.
It said CIMB Niaga reported 3Q26 net profit of 1,056 billion rupiah (36.8% quarter-on-quarter fall, 41.8% year-on-year or y-o-y fall), bringing nine-month 2026 cumulative earnings to 4,492 billion rupiah (14.7% y-o-y decline).
Results fell below expectations, accounting for 67% and 63% of its and consensus full-year estimates, respectively, it said, noting that the shortfall was largely attributable to higher-than-expected provisioning, compounded by weaker non-interest-income amid continued NIM compression.
An analyst told StarBiz that he too remained cautious on CIMB Niaga’s near-term earnings outlook due largely to cost pressures and the increasingly competitive environment coupled with unpredictable external pressures.
MBSB Research in its note to clients said “unfortunately” CIMB Niaga’s poor outlook remains.
It said NIM outlook is less than ideal.
Although loan yields are rising encouragingly, this was offset by an increase in cost of funds from recent rate hikes, it said.
It said most of the repricing comes from the corporate portfolio, which is repricing quicker than the consumer portfolio.
“Unfortunately, management cannot verify if NIMs have reached its bottom, with the threat of future rate hikes looming,” it said, adding that liquidity had also tightened this quarter, which puts more pressure on cost of funds.
HLIB Research has maintained a hold with a lower target price of RM7.70 for CIMB while MBSB Research maintained its buy call with an unchanged target price of RM 8.35.
At last look, CIMB was at RM7.10 apiece.
