PETALING JAYA: CIMB Group Holdings Bhd expects year-on-year loans growth for 2022 to exceed that of last year’s.

       It is vying for a conservative loan growth until 2023, below or similar to the market’s, as it reshapes its overseas loan book and maintains its asset quality.

       For both its Thailand and Indonesian operations, the banking group will see below market loan growth due to its de-risking exercises, while Malaysia’s small and medium enterprise (SME), mortgage and auto categories will see above average growth, MIDF Research said.It said Malaysian SME loans growth in particular was overly tight in the past year and could be a core driver of earnings in the first half of financial year 2022 (1HFY22).

       RHB Research’s view is that CIMB’s loan portfolio will likely grow at a slower pace due to ongoing efforts to reshape its books in Indonesia and Thailand.

       It expects CIMB to end financial year 2021 with 2.5% loan growth.

       CIMB had a conference call with analysts this week. It guided for credit cost of 75-85 basis points (bps) for financial year 2021 and expects a further decline in financial year 2022, RHB said.

       It added that loans under relief assistance or Lura have seen some uptick since the end of 2021 due to applications for the Financial Management and Resilience Programme (Urus). It said Urus is below 1% of CIMB’s Malaysia consumer loan book.

       AmInvestment Research said for financial year 2022, CIMB has guided for stable to marginally negative net interest margin (NIM) – Malaysia: stable to marginally drop in NIM; Indonesia and Singapore: decline in interest margins.

       CIMB is expected to release its fourth quarter 2021 (Q4’21) financial results on Feb 28.

       AmInvestment expects the group’s reported net profit in Q4’21 to be higher than Q3’21.

       This is due to the non-repeat of a lumpy impairment of goodwill in Q3’21 despite higher credit cost in Q4’21.

       Hong Leong Investment Bank (HLIB) Research said CIMB management was cautiously optimistic on its outlook and upcoming results are likely to come within expectations, meeting overall financial year 2021 guidance.

       The house said its forecasts were left unchanged and expects steady NIM, better fee and trading performance, along with stronger loans growth on a sequential basis for Q4’21.

       However, it adds that higher quarter-on-quarter net credit cost will cap the broad improvement.

       HLIB Research maintains a “hold’ on the stock with a target price (TP) of RM5.40 a share. MIDF downgraded the stock to “neutral” with an unchanged TP of RM5.55 a share. Both RHB and AmInvestment maintained their “buy’’ calls on the stock with a TP of RM6.30 and RM5.51 a share respectively.