KUALA LUMPUR, Feb 4 — CIMB Group Holdings Bhd expects to see a three to four basis points (bps) net interest margin (NIM) compression for the full year of 2020 with the recent reduction in the overnight policy rate (OPR).
In January 2020, Bank Negara Malaysia’s Monetary Policy Committee reduced the OPR by 25 bps to 2.75 per cent — the lowest since 2011.
CIMB’s group chief executive officer Tengku Datuk Seri Zafrul Aziz said the reduction would have a marginal impact on its topline.
To mitigate this impact, Tengku Zafrul said the bank would look at optimising some of its planned investments to ensure the cost-to-income ratio, efficiency, and productivity continued to improve.
“Of course, it (OPR) will impact the whole industry. We, as a bank, will need to make sure that (we will) focus on areas that we can improve on to mitigate any shocks.
“As you know, OPR cut has a small impact but we also need to be mindful of external shocks that can happen because the performance of a bank is very highly correlated to gross domestic product,” he told reporters after the signing of a memorandum of understanding (MoU) between CIMB Group and Malaysia External Trade Development Corporation (MATRADE) here, today.
Tengku Zafrul said the market consensus is that the banks are expecting another cut in the OPR in the second half of this year.
Earlier, CIMB and MATRADE signed an MoU to enhance local exporters’ capabilities in Economic, Environmental and Social (EES) areas through a series of training for Small and Medium Enterprises (SMEs) called ‘SMEs Sustainable Exporters Programme’.
The programme, which is an initiative under the Sustainability Action Values for Exporters (SAVE) campaign by MATRADE, will see both parties joining forces to provide up to 12 training sessions for SMEs registered with the national trade promotion agency.
The programme aims to train and provide benefits for up to 400 SMEs, and the training sessions which will begin in March this year, will expose them to sustainability policies and practices for their businesses and operations, particularly to equip them for markets that have embraced or are moving towards the EES principles.
Tengku Zafrul said for the programme, CIMB would be focusing on two sectors, namely food and beverage and electrical and electronics.
The SAVE campaign, launched in October last year, is MATRADE’s five-year plan to facilitate Malaysian exporters’ move towards sustainability.
The effort involves capacity building activities, benchmarking through sustainability reporting, business matching for sustainable Malaysian exporters and recognition through awards. — Bernama
