KUALA LUMPUR, Feb 28 — Maybank and CIMB , Malaysia’s top two banks, expect stronger demand for corporate and consumer loans in the South-east Asian region, driven by improving economies, to support their overall loans growth in 2018.
CIMB Group Holdings Bhd, Malaysia’s second-largest bank, said it was targeting improved loan growth this year as it expects performance in its Thailand, Indonesia and Singapore units to recover. Its loan growth weakened to 0.2 per cent last year against a target of 7 per cent.
“We are expecting Indonesia to come in with mid single digit loan growth, and high single digit for Thailand and Singapore (this year),” CIMB Group Chief Financial Officer Shahnaz Jammal said at an earnings briefing today.
Domestic loans grew 6.5 per cent for CIMB in 2017 and 5 per cent for Malayan Banking Bhd (Maybank), lifting overall loans growth for both banks.
“(With the strong external environment) think the investment and capex cycle will start and that will translate to a bit of loan growth on the corporate side,” Maybank Group President & CEO, Datuk Abdul Farid Alias, said at a separate results briefing.
Maybank, Malaysia’s largest bank by assets, reported a 4 per cent group loan growth in 2017, a rate it targets this year as well.
Both banks recorded comparable net interest margins (NIMs) -the difference in interest paid and earned and a measure of bank profitability - with CIMB at 2.63 per cent and Maybank at 2.36 per cent. While Maybank expected an expansion in NIM of 5 basis points in 2018, CIMB projected a 5-10 basis points compression.
CIMB saw higher provisions in the Singapore and Thailand markets for commodity-related loans last year, while Maybank said provisions for oil and gas loans had reduced.
Maybank reported a drop in its quarterly profit on Wednesday, while CIMB posted a rise. Maybank recorded a 10 per cent decline in fourth-quarter net profit, despite a slight rise in net interest income. Excluding one-off proceeds from the sale of securities in 2016, the profit rose by 22.4 per cent, the bank said in a statement.
For the full year, the bank said a disciplined approach to pricing of loans and deposits helped it achieve a record performance, with profit before tax breaching the RM10 billion mark for the first time, compared with RM8.84 billion a year earlier.
CIMB reported a 24 per cent jump in fourth-quarter net profit, helped by a rise in non-interest income and cost-cutting.
Net non-interest income rose 8 per cent to RM1.3 billion, while net interest income fell 4.5 per cent to RM2.53 billion. — Reuters
