CIMB MAKES DIGITAL BANKING PUSH IN REGION
JAKARTA: CIMB Group Holdings Bhd is making a push into digital banking in Southeast Asia, starting with Vietnam, as Malaysia’s second-biggest bank by assets seeks to expand in the region without swelling costs.
The lender will launch its first fully digital bank in Vietnam next month, followed by the Philippines, where it has received a licence, said chief executive officer Tengku Datuk Seri Zafrul Tengku Abdul Aziz in an interview here, yesterday. Both markets are new to CIMB.
Digital retail banking will allow lenders to reduce their cost-toincome ratios to 20 to 30 per cent from around 50 per cent once such operations gain size and momentum in five to 10 years, said Tengku Zafrul.
Cost savings is one reason why Bloomberg Intelligence analyst Diksha Gera sees CIMB continuing to improve profitability over the next two years.
“That’s where it’s important that we have partnerships in those markets — to achieve scale, to accelerate the scale that we plan to have.”
He plans to work with retailers and telecommunication companies to “build a strong ecosystem”.
The bank may also consider starting a digital bank in Thailand in the next two to three years, he said.
CIMB has rallied 32 per cent this year, beating the local benchmark, as shrinking loan-loss provisions and higher interest income boosted profit.
While the bank reduced headcount in selected areas, it is still expanding in Southeast Asia and building up its wealth management and investment banking businesses.
The bank’s ratio of costs to income improved to 52.1 per cent in the nine months ended September from 54.6 per cent a year earlier, results showed last month. Bloomberg