4) CIMB Islamic
CIMB Islamic’s Y-o-Y PBT decreased by 18.8% to RM114 million due to the slower Islamic capital markets activity. CIMB Islamic’s gross financing assets increased by 6.2% Y-o-Y, accounting for 14.2% of total Group loans. Total deposits grew by 27.5% Y-o-Y to RM48.2 billion.
5) Other Highlights
On the M&A front, CIMB Group decided to abort the proposed merger discussions with RHB Capital Berhad and Malaysia Building Society Berhad in 1Q15 in light of the economic conditions.
6) Target 18 (“T18”) and Key Organisation Changes
On 26 February 2015, Tengku Dato’ Zafrul Tengku Abdul Aziz was confirmed as Group CEO. Dato’ Sri Nazir Razak had taken over as Chairman of CIMB Group on 1 September 2014.
On 6 February 2015, CIMB Group Holdings outlined its new T18 plans and key organization changes, with a mid-term target of achieving an ROE of 15%, CET1 ratio of over 11%, a cost to income ratio of below 50% and a 60% consumer banking income contribution by end-2018. The reorganisation exercise will see the creation of new regional divisions and key management changes across the Group. On 12 March 2015, the Group had announced the nomination of Tigor M. Siahaan as President Director of CIMB Niaga, pending regulatory approvals, as well as the appointment of Effendy Shahul Hamid as CEO, Group Asset Management & Investments and Kwan Keen Yew as Group Chief Compliance Officer.
As part of the T18 initiative, the Group closed its offices in Sydney and Melbourne in Australia, in line with the objective of reducing its Asia Pacific investment banking and equities operating cost by 30% in 2015. On 15 May, the Group announced a voluntary MSS to employees in Malaysia and Indonesia as part of the realignment of cost structures and operating efficiencies.
7) Outlook
"As predicted, 2015 looks challenging and is CIMB's year of recalibration. We will continue to focus on cost management and operational streamlining, at the same time continue to ensure core operations remain robust. It's early days yet, but the changes and decisions we have taken in line with T18 are starting to show some results, and we will continue to be single minded and focused on the execution of our plans," said Tengku Zafrul.
“We remain cautious on the Group’s outlook given the regional economic environment and the moderation in consumer spending in Malaysia. CIMB Singapore continues to perform positively with continued business growth. CIMB Thai will likely show operational improvements despite the uncertain macroeconomic environment. And as expected, CIMB Niaga remains challenged by near term asset quality concerns in light of ongoing economic uncertainties,” said Tengku Zafrul.
