Malaysia’s CIMB expects 15 percent growth in lending

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Malaysia’s second-largest bank by assets CIMB Group is expecting higher lending this year, particularly on its Jakarta listed unit Bank CIMB Niaga.

CIMB Group chief executive Nazir Razak said that the company expected a 15 percent increase in its lending this year, almost four percent higher than the 11.8 percent it achieved last year.

“All sectors will contribute equally,” Nazir said after the company’s annual general meeting in Kuala Lumpur on Wednesday.

At the meeting, the company reported a 15.7 percent increase in commercial banking loans last year. Meanwhile, retail and corporate loans grew 10.1 percent and 6.4 percent respectively.

In Indonesia, CIMB Group expects higher credit increase than the group’s total expected achievement.

“We expect Bank CIMB Niaga to increase 18 percent more or less. Our lending in Singapore and Thailand may grow faster, however, it is only a percentage and we are still small there,” Nazir said.

CIMB Group currently holds 97.94 percent stake in Bank CIMB Niaga, which contributed around 34 percent to the parent company’s total profits before tax of RM 5.68 billion (US$1.87 billion) last year.

Bank CIMB Niaga’s total lending rose by 16 percent last year, slower than Indonesia’s national average lending growth of 22.9 percent.

CIMB Niaga president director and CEO Arwin Rasyid said that his company would operate in all sectors in
Indonesia.

“We are not the biggest [in Indonesia]. It is impossible to chase those big banks in term of the number of branches and ATMs. What we will chase is electronic banking,” Arwin said.

Nazir believes that CIMB Group can improve its business in Indonesia and expects to see Bank CIMB Niaga’s contribution to touch 40 percent by 2015.

“By 2015, we hope to see a composition of Indonesia 40 percent, Malaysia 40 percent and the remaining contributing a combined 20 percent,” he said.

The company’s business in Malaysia contributed about 57 percent to total profits last year.

CIMB Group currently operates in 17 countries. Last year, the company acquired most of Royal Bank of Scotland Group plc’s cash equities and associated investment banking business in Asia Pacific for £173.9 million ($265.4 million).

CIMB Group earlier this week that it has started investment banking and brokerage business in
Mumbai, India.

“In 2013, we will also open in Taiwan and Laos. We are operating in many countries, however, our main operation remains in ASEAN region, particularly in Malaysia and Indonesia,” Nazir said.

Business in Taiwan is expected to be launched next month, the company said earlier.