Instead of being a universal bank across Asean, CIMB wants to have a niche in each market, says group CEO

[KUALA LUMPUR] CIMB wants to find its niche in each of the markets it is in, instead of trying to serve every customer segment across Asean, said group chief executive officer Novan Amirudin.

The Malaysian lender positions itself as an Asean-focused bank and has operations in 10 markets globally.

As one of the largest banks in Malaysia, it has the scale to serve the full spectrum of customers, but it cannot do this elsewhere.

By doubling down on its strengths in its other markets, Novan expects this will help boost the return on equity (ROE) of the bank.

“We’re looking at sharpening our focus in (each market) to improve our returns as a niche player, rather than trying to be a more universal player,” he said at the bank’s media day on Monday (Jul 21). The event was held at CIMB’s headquarters in Kuala Lumpur.

For example, Singapore serves as a wealth and treasury hub for the bank to connect to the wider Asean region.

In Indonesia, Novan is positive on the growth of its Islamic banking business, given that penetration for the segment is low, despite the country having a large Muslim population.

Thailand and Cambodia serve as strong centres for its cross-border wholesale segments.

“If you look at Thailand closely, there are very niche players who are so focused on certain segments … and they are making that double-digit ROE,” Novan said.

In Vietnam and the Philippines, CIMB operates only as a digital bank, despite holding a full banking licence.

In particular, the bank has chosen to partner e-commerce players in the Philippines to scale faster, as expanding organically on its own is “extremely difficult” due to the large incumbents in the market.

Focusing on its strengths in the individual markets can help the bank better allocate its resources to grow, especially in times of uncertainty.

“We operate in all these different jurisdictions based on how we can contribute to customers and societies in that particular market. If we cannot play a meaningful role, then we’d need to find a different angle for us to play a meaningful role,” he said.

“We then need to reallocate that capital somewhere else, where we can generate better returns – and there are many opportunities for us,” he added.

This is also part of the lender’s six-year growth plan – called Forward30 – that it launched in March, to accelerate growth and future-proof the organisation.

The plan has four main strategies: to optimise and reallocate capital, build its deposit franchise to reduce cost of funds, improve cross-selling at the bank, and increase productivity and efficiency.

By 2030, CIMB aims to be among the top three in net promoter score, in the top quartile for ROE among its regional peers, to have a current and savings account ratio of 45 per cent, a non-interest income ratio of between 33 and 34 per cent, and a cost-to-income ratio in the low 40 per cent.

Tariff uncertainty

Novan noted that the bank’s strategy would enable it to mitigate some impact from US tariff policies.

While the exact impact of the tariffs is still unknown, he expects it will cause economic slowdown, which does not bode well for the bank’s loan growth.

But focusing on non-interest income can offset the decline in interest income. Becoming more operationally efficient can also reduce costs, and the bank has worked to reduce its risk profile.

“Tariffs are one factor that would impact a company’s and a bank’s financials, but it’s how we then choose to play with the different levers to offset that situation that is the important part,” he said.