CIMB again caught out in Singapore. Singapore business for CIMB is an issue….worst loan write off and now money laundering….we all know despite MAS having a reputation for strict regulation officially has been found out ….lot of the money which comes in from China, Russia, India, U.K. etc is black money ….they let it through as it helps the economy, asset prices etc ….
Maybank, CMIB and BIMB roaring.... Two end with IB should having two start with M also seeing that a lot of people discuss about mercury securities recently, Since they are working with m'sia stock biz guess and public mutual, guess their growth rate is super strong also. Maybe can put inside watchlist to monitor first....
Mediocre Banking Sector Results: NIM And NOII Centre Of Discussion By Editor - September 10, 2023
The banking sector saw a mediocre season with earnings entirely within expectations, this is despite some surprises in tailwinds and headwinds. NIM compression this time was a lot heavier than previously guided for (recall that banks were guiding for “stable-to-minor” compression in 1Q23). NOII improvement was expected, being guided for as a core earnings driver (which came true, but it was unevenly distributed).
MIDF analysts give their guidance for the sector and it’s more skewed towards the negative, largely due to the slower-than-expected NIM recovery and potential asset quality irritation. Nearly all banks revised their NIM guidance downward.
However, on a more positive note, future quarters may see possible positive revisions to NCC guidance (they were initially too conservative). Earnings: Relatively stable, NIM and NOII are central focus. Aggregate Core Net Profit (Core NP) up by +0.6%qoq. It was a good quarter for topline – despite NIM compression, NII largely remained stable to slightly negative while NOII did mostly see solid improvement, mostly on the side of treasury income (though in some cases disappointed).
Provisioning did pick up from last quarter’s softer activity, with a few banks amping up on credit costs for a poorer macroeconomic outlook and asset quality irritation. There was a minor issue of slightly elevated tax rates in the quarter, due to higher provisioning and investment-related gains that are less tax deductible.
As for the balance sheet, growth was poor but expected to pick up. Weaker corporate loan growth offered downside pressure. Retail contributions – particularly solid mortgage and hire purchase growth – were bolstered by strong unsecured loan offerings. Unfortunately, this was not enough to offset weaker growth coming from the non-retail side – though the industry has guided for a much healthier post-election pipeline in 2H, maintaining their far-from-target loan growth forecasts. Deposit growth was more mixed, but liquidity remains ample.
CASA attrition on the other hand took a light breather as pricier FDs matured without renewal but should resume in subsequent quarters. Different banks took different approaches to managing NIM optimisation, hence reporting varying quarterly deposit growth figures.
Increasing impairment pressure within certain brackets, but heavy write-offs keep GILs manageable. Asset quality pressure mainly came from the residential mortgages and SMEs linked to RA loans, though there was some irritation already coming from riskier overseas and unsecured segments. Few banks have guided that GIL ratio is close to peaking (or has already peaked). While LLC values have come down, some banks are looking at chunkier recoveries in the coming quarters to keep this manageable while refraining from making larger allocations.
Among the banks, Maybank saw an unexpected, massive non-fee income gain within the quarter, CIMB displayed exceptional performances in almost all aspects, especially loan growth. But Affin saw an abnormally sharp sequential drop in NIMs, which dragged earnings. RHB brought in decent quarterly earnings, but this was largely driven by overlay writebacks – while everything else was lacklustre.
From a pure valuation perspective, BIMB remains the most attractive while Affin is the least. Moving forward, the house is neutral for 2H outlook and doubts that ROE outlook is going to be that much better than 1H. Loan growth outlook is positive – banks are very optimistic about 2H’s non-retail pipeline. NIM outlook is more neutral – i.e. most banks are guiding stable to positive movement, though MIDF is cautious of year-end deposit competition.
On the other hand, more banks are opting for full-cash dividends. BNM doesn’t seem likely to exercise any additional leniency in capital ratio levels soon. Regardless, several banks have already guided for higher dividend payouts and halting DRP programmes – signalling that they are happy with current CET1 levels.
Upcoming dividend of RM0.17 per share at 6.1% yield
Eligible shareholders must have bought the stock before 20 September 2023. Payment date: 12 October 2023. Payout ratio is a comfortable 53% but the company is not cash flow positive. Trailing yield: 6.1%.
Within top quartile of Malaysian dividend payers (5.2%). Higher than average of industry peers (5.2%).
Perak Corporation Berhad has entered into a Debt Settlement Agreement with CIMB Bank Berhad to settle the amount outstanding due and payable which stood at RM29.3 million.
The figure is based on the facility agreement the state-owned company’s subsidiary PCB Taipan went with CIMB to accept the revolving credit facility of RM30 million granted through various letters of offer and supplemental letters of offer from the bank. In 2020, CIMB had declared an event of cross-default by Perak Corp and its subsidiary PCB Taipan, in respect of the revolving credit facilities of up to RM90 million granted to them, following the declaration of an event of default by Affin Islamic Bank Berhad for financing extended to Perak Corp. CIMB had demanded full payment of the said revolving credit facilities.
Perak Corp said the debt settlement is part of the proposed debt settlement to restructure its debt obligations to comprehensively resolve the financial issues that has caused the group to trigger the prescribed criteria under the Practice Note 17.
He said banks’ net-interest margins are expected to improve in the last quarter of the year on easing credit cost and lower effective taxes.
“Banks have displayed resilience and achieved solid earnings in the recent quarterly results. We like Malayan Banking Bhd, RHB Bank Bhd and CIMB Group Holdings Bhd for their solid dividend yield while AMMB Holdings Bhd for its attractive valuations,” said Thong.
cimb is a multinational banking business. this includes indonesia thailand and malaysia.
Indonesia's economy advanced by 5.17% yoy in Q2 of 2023, faster than market forecasts of a 4.93% gain, and after a marginally revised 5.04% growth in Q1. This was the 9th consecutive period of expansion and the strongest pace in three quarters, as household consumption accelerated during the fasting month of Ramadan and the Eid-ul Fitr festivals (5.23% vs 4.54% in Q1). Also, there was a strong pickup in both government spending (10.62% vs 3.45%) and fixed investment (4.63% vs 2.11%). Net trade, however, contributed negatively, amid falls in both exports (-2.75%) and imports (-3.80%). On the production side, output growth quickened for agriculture (2.02% vs 0.43%% in Q1), manufacturing (4.88% vs 4.43%), mining (5.01% vs 4.92%), wholesale & retail trade (5.25% vs 4.92%), communication (8.02% vs 7.13%), and construction (5.23% vs 0.32%). The central bank for this year projected the economy to grow between 4.5-5.3%. In 2022, the economy expanded by 5.31%, the most since 2013. source: Statistics Indonesia
The Gross Domestic Product (GDP) in Malaysia expanded by 1.50 percent quarter-on-quarter in the second quarter of 2023, the second straight quarter of expansion, after a 0.90 percent growth in the previous quarter. source: Department of Statistics, Malaysia
Thailand’s economy rose 0.2% quarter-on-quarter in the three months to June 2023, well below market forecasts of 1.2% and slowing from a 1.9% expansion in the prior period. The slowdown was mainly due to the contraction from government spending (-0.8% vs -1.2% in Q1) and fixed investments (-2.8% vs 1.1%). Meanwhile, private consumption continued to rise further (3.7% vs 2.6%). Net trade contributed negatively to the GDP, as imports (2.2% vs 4.1%) grew faster than exports (1% vs 3.7%). On the production side, the agriculture sector decreased (-2.8% vs 2.9%) and the non-agriculture sector eased (0.5% vs 1.7%), due to smaller increases from the industrial (0.2% vs 0.7%) and services sector (0.9% vs 1.9%). source: Nesdb, Thailand
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....