CIMB joins Maybank in expecting another OPR cut before year end

KUALA LUMPUR, Aug 29 — CIMB Group expects Bank Negara Malaysia will make another cut of 25 basis point in overnight policy rate (OPR) by year-end to further stimulate the local economy.

CIMB Group Holdings Bhd chief executive officer (CEO) Tengku Datuk Seri Zafrul Tengku Abdul Aziz said, however, the second anticipated rate cut will have little impact on its net interest margin as it is nearing year-end while there will be no impact on fixed depositors. 

“Our loan growth performance for Malaysia is growing at an exceptional rate of 6.6 per cent backed by previous OPR cut,” he said in a press conference on its first half results for the financial year 2019 today. 

Earlier today, Malaysia’s largest bank by asset size, Maybank said it expects another OPR cut of 25 basis point amid anticipation of slower global growth.

In May, the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) reduced the OPR by 25 basis points to three per cent. It was the first cut since July 2016.

The MPC will meet again in September and November.

Meanwhile, Tengku Zafrul said the banking group is expecting a stronger growth from its foreign businesses in Indonesia, Thailand and Singapore. 

“Non-Malaysia profit before tax (PBT) contribution to the group rose 33 per cent in the first half this year (H1 FY19) compared with 31 per cent in the corresponding period. 

“Indonesia PBT was 20.2 per cent higher year-on-year at RM701 million in H1 FY19 driven by strong operating income. We believe that the Indonesia market will continue to grow for the rest of the year,” he said. 

CIMB recorded a net profit of RM2.7 billion in the first half, an increase of 14.5 per cent from the same period last year, after discounting a one-off gain of RM928 million from its 20 per cent divestment in CIMB Principal Asset Management. 

On the outlook, Tengku Zafrul said its main focus would be on loan growth, revenue generation and asset quality management. 

“Key financial targets are on track as our main markets continue to grow despite a challenging operating environment driven by continued trade tension.

“CIMB will continue to invest in its people and technology, particularly in the next two years, to achieve our Forward23 objectives,” he said. — Bernama