CIMB to invest on IT, operations

The move is part of the group’s progress from its T18 to F23 programme, says group CEO


CIMB Group Holdings Bhd is allocating RM900 million in capital expenditure for information technology (IT) and operations for the financial year ending Dec 31, 2019.

CIMB group CEO Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the move is part of the group’s progress from its Target 18 (T18) to Forward23 (F23) programme, which would translate into a 4% increase in expenditure in IT-related projects to RM400 million.

“This would be on top of the RM500 million we would invest on a business-as-usual basis. So effectively, it would be over 60% increase for this year,” he said.

Moving forward, he said the group maintains its loan growth target of 6% to 7% in Malaysia.

“We are cautiously optimistic that we will achieve the target based on the performance we have seen in the first quarter (1Q). We will also be announcing the results by the end of May,” he said.

He added that the bank’s performance is dependent on the country’s general economy, which is projected to grow at 4.5%.

“We are also targeting cost-to-income ratio at about 45% and common equity Tier 1 at 13%,” Tengku Zafrul said.

Meanwhile, he said the bank is working on at least three “big initial public offerings” by year-end.

The group posted a net profit of RM1.12 billion in its 4Q ended Dec 31, 2018, compared to the RM1.06 billion in the previous year’s corresponding period.

For the year, the group has achieved a record net profit of RM5.6 billion, which is 24.8% higher than the previous year’s RM4.48 billion.

The better numbers are attributed to strong performances from the group’s consumer and commercial banking, as well as lower provisions and costs.

According to the group’s Annual Report 2018, its new vision statement is advancing customers and society.

“In line with that, F23 sets out a two-prong focus of accelerating growth as well as future-proofing the group,” the report stated.

The group’s market postures to drive growth vary between countries. CIMB is expected to focus on scale and acceleration for Malaysia and Indonesia, while repositioning and growing in Thailand, Singapore and Cambodia.

As for the business in Vietnam and the Philippines, CIMB is expected to incubate and invest while seeking new ventures.