Broker: Maybank Investment Bank Berhad
Date of Report: July 31, 2025

CIMB Group Holdings: Navigating Steady Growth Amidst Regional Challenges — In-Depth Financial Analysis & Outlook 2025

Executive Summary

CIMB Group Holdings, one of Malaysia’s largest financial institutions, continues to demonstrate resilience and adaptability in a dynamic regional landscape. This comprehensive analysis covers the group’s latest performance, detailed financials, and outlook, with a spotlight on its Indonesian subsidiary, CIMB Niaga. The report is prepared by Maybank Investment Bank Berhad as of July 31, 2025.

Key Takeaways at a Glance

• Current Price: MYR 6.55
• 12-month Target Price: MYR 7.60 (+16%)
• Investment Rating: HOLD
• Market Capitalization: MYR 70.4B (USD 16.6B)
• Major Shareholders: Khazanah Nasional Bhd (21.5%), Employees Provident Fund (17.3%), Kumpulan Wang Persaraan (6.4%)
• Scheduled Results Release: August 29, 2025

CIMB Niaga: 2Q25 Performance and Strategic Focus

CIMB Niaga, the Indonesian arm of CIMB Group, posted a 2Q25 core net profit of IDR 1.65 trillion, reflecting a 4% year-on-year decline and a 9% dip quarter-on-quarter. For the first half of 2025, core net profit reached IDR 3.46 trillion, up 1% YoY but slightly below internal projections, though in line with consensus. The full-year net profit forecast for Niaga was trimmed by 2.8% on the back of lower net interest margin (NIM) estimates, but the effect on group profit is negligible (<1%).

Asset Quality and Loan Growth

• Loan growth remained decent at 6.8% YoY as of June 2025, with consumer loans up 4.7% YoY.
• Auto loans stood out, surging by 26.7% YoY, offsetting a 2.5% contraction in mortgages and modest 4.4% growth in other consumer loans.
• Corporate, commercial, and SME loans grew by 9.3%, 4.6%, and 7.3% YoY, respectively.
• Focus has shifted toward auto and unsecured consumer loans, and medium-sized SMEs, moving away from mortgages to optimize risk-adjusted returns.

Deposits and Funding Profile

• Total customer deposits increased by 4.8% YoY (from 2.5% YoY in March 2025).
• CASA (current and savings accounts) deposits rose 10.9% YoY, while time deposits contracted 6.6% YoY.
• Retail CASA (consumer and SME) grew by 8.1% YoY and now makes up 60.3% of total CASA.
• CASA ratio improved to 69.0%, up from 67.4% in March 2025, supporting funding stability.
• Loan/deposit ratio (LDR) stood at 87.3% as of June 2025.

Net Interest Margin (NIM) and Income Dynamics

• NIM slipped 6bps QoQ to 3.93% in 2Q25, still within management’s guidance (FY25E target: 3.9–4.2%).
• Loan yields fell 33bps QoQ, exceeding the 15bps decline in funding cost.
• Management observes easing competition for deposits, which could support future NIM stabilization.
• Non-interest income (NOII) was flat YoY in 1H25, with fee income up 4.1% and treasury/markets income up 9.5% YoY, but with a significant 24.3% YoY drop in loan recovery income.

Operating Expenses and Efficiency

• Operating expenses rose modestly by 2.7% YoY.
• Personnel and technology expenses increased by 3.6% and 10.2% YoY, respectively, while other costs declined by 4.3%.
• Cost/income ratio (CIR) edged up to 45.5% in 1H25 (from 43.9% in 1H24) due to softer revenue growth.

Asset Quality and Capital Adequacy

• The gross impaired loan (GIL) ratio improved to 3.9% at end-June 2025 (from 4.1% in March).
• Loans at risk (LAR) declined to 8.4% from 8.6% QoQ.
• Credit cost improved to 65bps in 1H25, down from 89bps in 1H24, prompting management to lower credit cost guidance to 0.6–0.8% (from “within 1.0%”).
• Tier 1 capital ratio remains robust at 22.9%.
• Liquidity coverage ratio (LCR) at 193%; net stable funding ratio at 116%.

Return on Equity (ROE) and Management Targets

• 2Q25 ROE: 13.1%; 1H25 ROE: 13.5% (target for FY25: 14–15%).
• Other FY25 targets maintained: loan growth 5–7%, NIM 3.9–4.2%, CIR <45%.

Table: CIMB Niaga Key Financials (2Q25)

CIMB Group Holdings: Group-Level Performance and Outlook

Business Overview

CIMB Group Holdings offers a comprehensive suite of consumer and investment banking services and maintains a significant regional presence — particularly through its majority stake in PT CIMB Niaga.

Share Price and Performance

• 52-week high/low: MYR 8.49 / MYR 6.35
• 3-month average turnover: USD 23.8 million
• Free float: 60.2%

Historical and Projected Financials

Growth and Profitability Trends

• Operating income projected to rise steadily, reaching MYR 25.2B by FY27E.
• Core net profit forecasted to reach MYR 8.7B by FY27E, with core EPS growing by 8.3% in FY27E.
• Dividend yields remain attractive, projected above 6% over the forecast horizon.
• Return on average equity (ROAE) to stay in the 10.8–11.1% range.

Balance Sheet Strength

• Total assets expected to grow from MYR 733.6B (FY23A) to MYR 854.6B (FY27E).
• Loans and advances to expand from MYR 429.5B (FY23A) to MYR 501.6B (FY27E).
• Customer deposits set to rise from MYR 482.4B (FY23A) to MYR 551.3B (FY27E).
• Capital adequacy remains healthy, with CET1 ratio forecasted to improve from 14.5% (FY23A) to 15.7% (FY27E).
• Loan loss coverage is projected to rise, supporting asset quality assurance.

Key Ratios and Metrics

• Net interest margin (NIM) expected to stabilize around 2.17% through FY27E.
• Cost/income ratio to hover just above 47%.
• Gross NPL ratio anticipated to remain low at about 2.1% by FY27E.

Strategic and Risk Considerations

• CIMB Group’s domestic dominance means Malaysian economic cycles significantly impact group performance.
• Regional exposures (Indonesia, Thailand, Singapore) subject the group to economic volatility, currency risk (notably IDR), and tightening liquidity conditions.
• Capital and liquidity positions remain strong, providing resilience against external shocks.

Investment Recommendation and Outlook

• Maybank Investment Bank maintains a HOLD rating for CIMB Group, with a 12-month target price of MYR 7.60 (FY25E P/BV: 1.1x, COE: 10.1%, g: 4%, ROE: 10.9%).
• While growth is steady and asset quality is improving, current valuations reflect much of the near-term upside.
• Dividend yields are attractive and capital adequacy robust, but investors are advised to watch for regional macroeconomic risks and currency movements.

Contact and Research Coverage

This analysis is provided by Maybank Investment Bank Berhad, with regional research teams offering deep sectoral expertise across Malaysia, Singapore, Indonesia, Thailand, Vietnam, the Philippines, Hong Kong, India, and the UK.

Conclusion

CIMB Group Holdings continues to deliver solid growth and maintain strong fundamentals, even as regional subsidiaries like CIMB Niaga face shifting market dynamics. With a prudent approach to asset quality, cost management, and capital allocation, the Group is well-positioned for sustainable performance, though macroeconomic and currency risks warrant ongoing vigilance.