KUALA LUMPUR: CIMB Group Holdings Bhd (CIMB) is eyeing to accelerate its growth in Malaysia and Indonesia, its two largest markets that collectively contribute more than 80% of the group’s pre-tax profit (PBT), despite the uncertain outlook for 2020, then group CEO Tengku Datuk Seri Zafrul Tengku Abdul Aziz said.
In the banking group’s 2019 annual report, the last report before he was appointed as Malaysia’s Finance Minister in early March this year, Tengku Zafrul said the group would stay on course to ensure that its Forward23 aspirations remain on track.
Forward23 is a mid-term growth strategy launched by CIMB in 2019 which centres on five strategic pivots – customer-centricity, sustainability, ventures and partnerships, technology and data, and its people.
“CIMB has now started our second year of the five-year Forward23 journey. Our focus for the first year was to establish a governance framework to ensure portfolio oversight and delivery of Forward23.
“We have made some great strides in terms of the five strategic pivots that drive our Forward23 plan,” he said.
Tengku Zafrul said executing Forward23 programmes across the five strategic pivots would remain key this year.
He said this includes ensuring the realisation of the financial benefits from its Transforming Customer Journeys (TCJ) roadmap, strengthening the tech resiliency and stability of its platforms, recalibrating business towards a more digitally-led model, commencing a structured productivity programme as well as keeping the momentum of the group’s sustainability efforts.
Additionally, he said, the group would continue to grow its balance sheet prudently and keep strong controls on costs and investments.
Tengku Zafrul said the Malaysian operations performed well on a business-as-usual (BAU) basis with PBT improving 8% in 2019 driven by strong loan growth of 6%, better trading income as well as the gain from the sale of the Malaysian equities business, resulting in a 69% contribution to group PBT.
On the other hand, he said, Indonesia saw its PBT decline by 20.2% year-on-year largely due to higher corporate provisions.
He said 2019 displayed an easing of negative sentiments, although uncertainty was still a prevailing theme, in contrast to the “roller-coaster year” of 2018.
“As a financial institution with a presence in all 10 Asean countries, CIMB was not spared from these macroeconomic tensions.
“However, despite these headwinds, the group was able to weather the uncertainties and meet our key 2019 targets,” he said.
Meanwhile, he said, just two months into 2020 the group has already experienced multiple macro shocks with the most serious being the Covid-19 outbreak that has dominated media headlines.
He said the impact of Covid-19 on economic activities has been felt around the world with an estimated 0.2% reduction in global Gross Domestic Product growth.
“With the completion of the first year of Forward23, we will continue to maintain our momentum and look forward to the successful delivery of all our mid-term growth targets, in spite of the uncertain outlook due to the ongoing Covid-19 outbreak as well as other socio-political and macroeconomic challenges,” he added. – April 9, 2020, Bernama
