MARC affirms CIMB Group holdings ratings with stable outlook  

The ratings outlook is stable

  

MARC has affirmed its long-term and short-term corporate credit ratings of AA+/MARC-1 on CIMB Group Holdings Berhad (CIMB Group) and its issue rating of AA on the group’s RM10.0 billion Basel III–compliant Tier 2 Subordinated Debt Programme. The ratings outlook is stable.

CIMB Group is a non-operating financial holding company whose key subsidiary CIMB Bank Berhad accounted for 86.0% of its total consolidated assets of RM608.6 billion as at end-1Q2021 and historically contributed to a substantial portion of the group’s dividend income. CIMB Bank has a AAA/Stable rating from MARC based on the bank’s systemic importance given its significant market position in loans and deposits in the domestic banking industry. CIMB Bank is a key part of the group that has been accorded domestic systemically important bank (D-SIB) status since 2020. CIMB Group’s long-term rating of AA+ reflects its subordination to CIMB Bank.

For 1Q2021, CIMB Group recorded pre-tax profit of RM2.9 billion, significantly higher than RM0.7 billion in the previous corresponding period, which was mainly due to higher impairment charges as part of a raft of pre-emptive measures during the onset of the pandemic. Overall loan growth remains anaemic, growing by 0.7% y-o-y to RM366.6 billion as at end-1Q2021. Of its key operating markets, CIMB Group’s domestic loans accounted for 62.5% of its loan book, with Indonesia at 14.6%, Thailand at 8.9% and Singapore at 8.3%. Gross impaired loans (GIL) ratio stood at 3.44% as at end-1Q2021; its higher GIL ratios in Singapore (4.83%), Indonesia (8.09%) and Thailand (5.31%) have contributed to the need to reshape its regional portfolios in the near term. CIMB Group’s capital position remains solid with its Common Equity Tier 1 and total capital ratios standing at 12.1% and 16.2% as at end-1Q2021.

For 2020, CIMB Group received dividend income of RM1.8 billion that was more than sufficient to meet its debt obligations. Its debt-to equity ratio was stable at 0.57x, although borrowings have been on a rising trend since 2016, largely due to Basel III–compliant sub-debt issuances. Given these issuances are invested in similar capital instruments issued by its banking subsidiaries, the debt servicing costs under the issuances have been met by cash flows from its subsidiaries.

-Ends- 

Contacts:
Farhan Darham, +603-2717 2945/ farhan@marc.com.my;
Haziq Najmuddin, +603-2717 2965/ haziq@marc.com.my;
Mohd Izazee Ismail, +603-2717 2947/ izazee@marc.com.my 

[This announcement is available on MARC’s corporate website at www.marc.com.my ]

----   DISCLAIMER    ----

This communication is provided by Malaysian Rating Corporation Berhad (MARC) based on information believed by MARC to be accurate and reliable as derived from publicly available sources or provided by the rated entity or its agents. MARC, however, has not independently verified such information and makes no representation as to the accuracy or completeness of such information. Any assignment of a credit rating by MARC is solely to be construed as a statement of its opinion and not a statement of fact. A credit rating is not a recommendation to buy, sell, or hold any security.

© 2021 Malaysian Rating Corporation Berhad

Send us your press releases to pressrelease.zawya@refinitiv.com

© Press Release 2021

Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.

The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.

To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.


More From Press Releases