Analysts optimistic about CIMB Group’s growth in 2018
KUALA LUMPUR: Analysts are slightly more optimistic about CIMB Group Holdings Bhd’s (CIMB) performance in 2018 following an analyst meeting.
In a report, the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research) said it is slightly more optimistic on CIMB’s loans growth in the financial year 2018 (FY18) which is expected to be supported by corporate loans.
“Management indicated that corporate loans pipeline that was slated in the fourth quarter of FY17 (4QFY17) is starting to materialise in 1QFY18.
“The corporate loans growth also seem to be broad based in terms of type and sector. This is expected to lead the loans growth in FY18,” it added.
Meanwhile, it pointed out that retail loans growth rate in FY18 is also expected to be at similar level or slightly less than the growth registered in FY17.
“Thus, we can expect a reversal in trend from FY17 where retail segment were the main loans growth driver. However, we do not discount the possibility of mortgages in Malaysia to continue to grow robustly given continuing demand for affordable residential property,” the research team said.
In a separate note, Kenanga Investment Bank Bhd’s research arm (Kenanga Research) believed that CIMB’s FY17 estimated loans target is achievable.
“CIMB guided for overall loans growth of circa seven per cent (as targeted previously) coming from the resilient domestic market coupled with improvement in Thailand and a stable Niaga.
“Although the expected corporate demand in 4Q17 did not materialise, resilient demand from mortgages will support the circa seven per cent loans target with Indonesia loans driven by demand from corporates and retail,” it said.
Overall for the group, the research team noted that CIMB expected corporate and business loans to pick up, propelling FY18 loans to mid-to-high single digits but likely offset by slowdown from retail.