CIMB accelerates growth with Forward23+; underscores long-term resilience

15 April 2021

Forward23+ strategy focuses on reshaping portfolios to drive growth in key segments that will deliver sustainable financial returns and ultimately create consistent value for all our stakeholders.

Kuala Lumpur - CIMB Group Holdings Berhad (“CIMB Group” or the “Group”) held its 64th Annual General Meeting (“AGM”) with shareholders today virtually followed by an Extraordinary General Meeting (“EGM”). The meetings were chaired by Datuk Mohd Nasir Ahmad, Chairman of CIMB Group, with the Board of Directors and Dato’ Abdul Rahman Ahmad, Group CEO of CIMB Group in attendance. 

CIMB Group’s underlying business proved to be resilient in FY20 despite the adverse effects of the COVID-19 pandemic. Aggressive cost reduction targets were exceeded, with a 5.5% or RM524 million decrease in operating expenses leading to an improved cost-to-income ratio (“CIR”) of 52.2%, down 1.2% YoY. Topline resilience, cost discipline and proactive measures to protect asset quality enabled the Group to strengthen its financial position and ensure it remains well-capitalised against shocks, leading to its highest ever CET1 ratio of 13.3%. It declared a proposed annual dividend of 4.81 sen per share for FY20, amounting to a total payout of RM477 million and a payout ratio of 40% in line with its dividend policy.

Speaking at the AGM, Datuk Nasir said, “On behalf of the Board, I would like to express my deepest appreciation to all our stakeholders for their continued trust and association with us over a remarkably challenging year. For CIMB, the past year was a litmus test for our ability to remain true to our purpose of advancing customers and society towards a better tomorrow, providing us with opportunities to reinforce the trust our stakeholders place in us. Throughout the region, we stood by our customers and assured them of unhindered access to financial support and services as people and businesses grappled with the wide-ranging impact of COVID-19 on their lives and livelihoods.”

“Backed by a sound institutional framework, the Group remained resilient in terms of having a strong capital position and healthy liquidity ratio notwithstanding market volatility and disruptions brought about by the pandemic. Guided by our recalibrated strategy known as Forward23+, we are now focused on accelerating growth in tandem with economic recovery. The Board will continue to provide guidance and oversight over the Group’s strategic imperatives to deliver sustainable financial returns and ultimately create consistent value for all our stakeholders,” Datuk Nasir added. 

Apart from that, Datuk Nasir said CIMB Group will continue to strengthen its sustainability agenda as the pandemic has also shown that sustainability and resilience are a necessity for all businesses. The outperformance of Environmental, Social and Governance (“ESG”) indices and funds during this period of economic uncertainties is a testimony of the demand by stakeholders for greater business transparency, accountability and innovation. CIMB Group is proud to be the first banking group in Malaysia and one of the first in ASEAN to adopt a Coal Sector Guide, where it commits to phase out coal financing from its portfolio by 2040. 

Dato’ Abdul Rahman said, “Our underlying business proved resilient in FY20, and we are building on our momentum in FY21 as the first full year under Forward23+ Strategic Plan. The Group will continue to drive strategic core programmes including among others, capital optimisation, cost management and portfolio reshaping initiatives. We are also making focused investments in key segments that offer strong opportunities for profitable growth, such as wealth management, treasury and markets, transaction banking and intra-ASEAN wholesale banking. We have started to make headway, and we are confident that we are on track to deliver on our ambition to become the leading focused ASEAN bank.”

“For 2021, the Group anticipates better performance across most segments and markets, with optimism fueled by a vaccine-driven economic recovery. However, the pace and extent of recovery remain both uncertain and uneven. The Group will continue to monitor asset quality and maintain a prudent approach to credit underwriting to achieve the right balance between profitability and growth. Digitalisation, both within the bank and for our customers, remains a key priority. We will continue to invest in and enhance our technology and digital platforms to increase productivity and improve customer experience, reflecting the accelerated shift towards digital banking over the past year,” Dato’ Abdul Rahman added.

Dato’ Abdul Rahman concluded that for FY21, stringent cost optimisation will remain a core focus to further improve productivity and efficiency. The Group will remain committed to supporting the governments’ efforts to help business recovery and economic growth across the region, while continuing to provide financial assistance to customers who have been impacted by the pandemic.

All 11 ordinary resolutions tabled at the AGM were successfully passed, including the audited financial statements for the financial year ended 31 December 2020 (“FY20”). Concurrently, two resolutions pertaining to the Group’s proposed establishment of a long term incentive plan (“LTIP”) were also passed at the Group’s EGM. The LTIP, which entails a combination of share options and performance shares that are awarded conditional upon the achievement of performance targets and value created, is part of the Group’s shift towards a more balanced compensation mix for senior management and closer alignment towards shareholder value creation.