KUALA LUMPUR, Aug 30 — CIMB Group Holdings Bhd expects the pressure on its net interest margin (NIM) to subside in the second half of this year (2H FY2023) as the group continues to focus on strengthening the current account and savings account (Casa) and deposit franchise.
Group chief executive officer Datuk Abdul Rahman Ahmad said the bank would maintain a cautious stance, given global headwinds, elevated interest rates and heightened deposit competition.
“All financial institutions are experiencing or expecting subsiding NIM pressure.
“I do not provide any projection but we do expect the NIM pressure to subside for 2H FY2023, probably closer to the end of the year,” he told a press conference in conjunction with its results announcement today.
Abdul Rahman noted that CIMB is confident to continue the momentum of positive financial performance and is currently on track to meet its 2023 target across all profitability metrics.
He also said the bank remains committed to its purpose, which is advancing its customers and society, as well as continuing to recalibrate the bank strategies to increase shareholders’ value.
“We will ensure our customers continue to have access to financing solutions to support their finances,” he said.
Meanwhile, group chief financial official Khairul Rifaie said the bank expects the overnight policy rate (OPR) to remain stable, or zero rate hikes or cuts towards the end of the year.
“We are expecting the OPR to remain stable. Any OPR rate hikes have a short-term positive impact on the net interest income (NII) and profitability, but that gets eroded quickly once we price up our deposits — it is just a timing issue,” he said.
CIMB registered a better net profit of RM1.77 billion in the second quarter (2Q) ended June 30, 2023, from RM1.28 billion a year earlier on the back of strong non-interest income (NOII) improvement.
Revenue went up to RM5.33 billion from RM4.88 billion previously, it said in a filing with Bursa Malaysia today.
The bank also announced an interim dividend of 17.5 sen per share, representing a payout ratio of 55 per cent — an increase of 50 per cent in 1H FY2022 — amid the group’s strong capital, funding and liquidity positions. — Bernama