CIMB Group Holdings Berhad
ANALYST UPDATES ON CIMB BANK (CIMB)
RHB Investment Bank
Date: 3 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
David Chong CFA
Nabil Thoo
Date: 3 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
David Chong CFA
Nabil Thoo
Share Price: RM7.81
Target Price: RM9.25
Rating: Buy
FY2025 Forecast:
Net Profit: RM8,281m EPS: RM0.78
DPS: RM0.43
Target Price: RM9.25
Rating: Buy
FY2025 Forecast:
Net Profit: RM8,281m EPS: RM0.78
DPS: RM0.43
Report Summary & Comments
CIMB’s FY24 results are in line, and meet its FY24 targets. Looking ahead, it has struck a cautious tone in its outlook and laid out modest FY25 targets. That said, the group will be embarking on its next strategic plan on much stronger footing, supported by much-improved asset quality with its LLC of 105% at an all-time high, solid capital, which opens up options for growth and/or capital returns, and a liquid balance sheet (LDR: 89%).
CIMB’s FY24 results are in line, and meet its FY24 targets. Looking ahead, it has struck a cautious tone in its outlook and laid out modest FY25 targets. That said, the group will be embarking on its next strategic plan on much stronger footing, supported by much-improved asset quality with its LLC of 105% at an all-time high, solid capital, which opens up options for growth and/or capital returns, and a liquid balance sheet (LDR: 89%).
UOB Kay Hian Investment Bank
Date: 3 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Keith Wee Teck Keong
Date: 3 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Keith Wee Teck Keong
Share Price: RM7.81
Target Price: RM8.12
Rating: HOLD
FY2025 Forecast:
Net Profit: RM8,294m EPS: RM0.77
DPS: RM0.414
Target Price: RM8.12
Rating: HOLD
FY2025 Forecast:
Net Profit: RM8,294m EPS: RM0.77
DPS: RM0.414
Report Summary & Comments
CIMB reported 4Q24 net profit of RM2,030.6m (+4.9% yoy, -11.2% qoq), bringing 2024 earnings to RM7,730.7m (+10.7% yoy). The results were broadly in line with expectations, representing 95%/98% of our full-year estimates.
CIMB reported 4Q24 net profit of RM2,030.6m (+4.9% yoy, -11.2% qoq), bringing 2024 earnings to RM7,730.7m (+10.7% yoy). The results were broadly in line with expectations, representing 95%/98% of our full-year estimates.
Affin Hwang Investment Bank
Date: 5 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Tan Ei Leen
Date: 5 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Tan Ei Leen
Share Price: RM7.80
Target Price: RM9.00
Rating: Buy
FY2025 Forecast:
Net Profit: RM8,097m EPS: RM0.755
DPS: RM0.492
Target Price: RM9.00
Rating: Buy
FY2025 Forecast:
Net Profit: RM8,097m EPS: RM0.755
DPS: RM0.492
Report Summary & Comments
The CIMB Group’s “Forward30” Strategy has set these key financial metrics/KPIs to be achieved by 2030: i) ROE of 12-13% (by 2027) and Top Quartile of the ASEAN peers (by 2030) vs. 11.2% (2024); ii) CASA ratio – 45% (2024: 43.1%); iii) NOII ratio – 33-34% (2024: 31%); iv) CIR – low 40% (2024: 46.7%); v) Net Credit Cost – 40 50bps (2024: 25bps); vi) CET1 – 13-14% (2024: vs. 14.6%); and vii) Net Promoter Score (NPS) of Top 3. Based on Exhibit 1, by way of CIMB achieving a higher CASA ratio of 45%, it is likely to be able to lower its COF by 10-20bps and will be one of the NIM drivers. Meanwhile, the Group also aims to raise its client franchise income to 75% of NOII from 65% today based on the cross-selling initiatives planned for Wholesale Banking and Wealth Management. Ultimately, having an ROE target of 12-13% implies a net profit level of RM9.3-10.1bn, which is above consensus’ earnings of ~RM9.3bn for 2027E (at ROE of 12%). Nonetheless, we note that operating in markets such as Indonesia also increases the overall risk to the group, of which will also be accompanied by a higher level of net credit cost, as CIMB had also guided on an increased level of 40-50bps (at Group level) by 2030.
The CIMB Group’s “Forward30” Strategy has set these key financial metrics/KPIs to be achieved by 2030: i) ROE of 12-13% (by 2027) and Top Quartile of the ASEAN peers (by 2030) vs. 11.2% (2024); ii) CASA ratio – 45% (2024: 43.1%); iii) NOII ratio – 33-34% (2024: 31%); iv) CIR – low 40% (2024: 46.7%); v) Net Credit Cost – 40 50bps (2024: 25bps); vi) CET1 – 13-14% (2024: vs. 14.6%); and vii) Net Promoter Score (NPS) of Top 3. Based on Exhibit 1, by way of CIMB achieving a higher CASA ratio of 45%, it is likely to be able to lower its COF by 10-20bps and will be one of the NIM drivers. Meanwhile, the Group also aims to raise its client franchise income to 75% of NOII from 65% today based on the cross-selling initiatives planned for Wholesale Banking and Wealth Management. Ultimately, having an ROE target of 12-13% implies a net profit level of RM9.3-10.1bn, which is above consensus’ earnings of ~RM9.3bn for 2027E (at ROE of 12%). Nonetheless, we note that operating in markets such as Indonesia also increases the overall risk to the group, of which will also be accompanied by a higher level of net credit cost, as CIMB had also guided on an increased level of 40-50bps (at Group level) by 2030.
Public bank Investment Bank
Date: 6 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Wong Ling Ling
Date: 6 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Wong Ling Ling
Share Price: RM7.80
Target Price: RM8.90
Rating: Outperform
FY2025 Forecast:
Net Profit: RM8,196m
EPS: RM0.764
DPS: RM0.458
Target Price: RM8.90
Rating: Outperform
FY2025 Forecast:
Net Profit: RM8,196m
EPS: RM0.764
DPS: RM0.458
Report Summary & Comments
CIMB has introduced its new corporate strategy, Forward30, which outlines key areas for growth, while positioning the group to remain agile amidst a more volatile operating landscape. Despite the challenges, CIMB remains focused on leveraging its strong standing as a premier ASEAN bank to drive growth in cross-border income within the region. The new corporate strategy has identified 4 major pillars of growth, which is expected to help CIMB achieve its near-term ROE target of 12 13% by 2027, from 11.2% currently. In the longer run, CIMB aspires to enhance its ROE into the top quartile ASEAN bank by 2030. We think that the group’s nearterm ROE target of 12-13% by 2027 (FY24: 11.2%) is realistic, given the existing challenges across CIMB’s operating markets. We reiterate our Outperform call and TP of RM8.90 on CIMB.
CIMB has introduced its new corporate strategy, Forward30, which outlines key areas for growth, while positioning the group to remain agile amidst a more volatile operating landscape. Despite the challenges, CIMB remains focused on leveraging its strong standing as a premier ASEAN bank to drive growth in cross-border income within the region. The new corporate strategy has identified 4 major pillars of growth, which is expected to help CIMB achieve its near-term ROE target of 12 13% by 2027, from 11.2% currently. In the longer run, CIMB aspires to enhance its ROE into the top quartile ASEAN bank by 2030. We think that the group’s nearterm ROE target of 12-13% by 2027 (FY24: 11.2%) is realistic, given the existing challenges across CIMB’s operating markets. We reiterate our Outperform call and TP of RM8.90 on CIMB.
Hong Leong bank Investment Bank
Date: 6 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Chan Jit Hoong, CFA, CPA
Date: 6 Mar, 2025
Results Update
Q4 Ending: 31/12/24
Analysts:
Chan Jit Hoong, CFA, CPA
Share Price: RM7.80
Target Price: RM9.20
Rating: Buy
FY2025 Forecast:
Net Profit: RM8,001m EPS: RM0.75
DPS: RM0.488
Target Price: RM9.20
Rating: Buy
FY2025 Forecast:
Net Profit: RM8,001m EPS: RM0.75
DPS: RM0.488
Report Summary & Comments
To recap, Forward23+ aimed to reshape its portfolio and lower costs. In addition, management embraced a profitability first growth model instead of pursuing asset expansion aggressively. Back then, the 2024 aspiration was to achieve: (i) 11.5 12.5% ROE, (ii) <45% CIR, (iii) 50-60bp NCC, and (iv) >13.5% CET1. Overall, we find CIMB executed its overall business strategies effectively, looking at its recent financial results, where it posted an impressive 11.2% ROE and 14.6% CET1; these are higher vs 2019’s level of 9.3% and 12.9% respectively.
To recap, Forward23+ aimed to reshape its portfolio and lower costs. In addition, management embraced a profitability first growth model instead of pursuing asset expansion aggressively. Back then, the 2024 aspiration was to achieve: (i) 11.5 12.5% ROE, (ii) <45% CIR, (iii) 50-60bp NCC, and (iv) >13.5% CET1. Overall, we find CIMB executed its overall business strategies effectively, looking at its recent financial results, where it posted an impressive 11.2% ROE and 14.6% CET1; these are higher vs 2019’s level of 9.3% and 12.9% respectively.
CORPORATE DEVELOPMENTS
3 Feb 2025
Public Bank Bhd’s upcoming Q4 results, scheduled for release on 26/2/25, are expected to reflect the financial impact of the goodwill impairment at its 73.2%-owned subsidiary, Public Financial Holdings (PFH), which had recorded a goodwill impairment on its wholly owned subsidiaries, Public Bank (HK) Ltd, Public Finance Ltd, and Winton (BVI) Ltd. The impairment was approximately HK$810 million or RM463 million. (Source: TheEdge)
4 Dec 2024
On 10/10/24 it was reported that Public Bank Bhd would acquire 44.15% stake in LPI Capital for RM1.72bil by launching a Mandatory General Offer for LPI at RM9.80/share. Teh Li Shian Diona, daughter of the late Tan Sri Dr Teh Hong Piow also announced that the Estate and Consolidated Teh Holdings Sdn Bhd intended to undertake a restricted offer for sale of a portion of their Public Bank shares over a 5-year period, in compliance with the Financial Services Act. The acquisition of 44.15% in LPI Capital (175.9 million shares) was completed on 4/12/24. (Source: TheStar, TheEdge)