Cimb Group Holdings Bhd · MYX:CIMB
Cimb Group Holdings Bhd — Investor Day (October 2024)
41 slides from Cimb Group Holdings Bhd's investor day presentation, Oct 14, 2024
Slide 1: CIMB Singapore Investor Day 2024
CIMB Singapore Investor Day 2024 14 October 2024 MOVING FORWARD WITH YOU
Slide 2: Agenda
Agenda 01 CIMB Group Forward23+ Strategy 02 CIMB SG Overview 03 CIMB SG Forward23+ Strategy 04 Looking Beyond Forward23+ 05 Expanding our Consumer Banking Presence 06 Turbocharging our SME Banking Franchise 2 Copyright 2019 Accenture. All rights reserved.
Slide 3: CIMB Group Forward23+ Strategy
01 CIMB GROUP FORWARD 23+ STRATEGY
Slide 4: The Forward23+ strategic house has been refined for 2024
Strategy The Forward23+ strategic house has been refined to shape the Group’s 2024 business plan and key focus areas Vision To be the leading focused ASEAN bank Strategic Themes for 2024 1 Delivering a) Rejuvenate NII & NIM b) NOII Growth c) Cost Optimisation Sustainable Financial Transform Transact
Slide 5: We have a clear view on where we will compete and how to win
We have a clear view on where we will compete and how to win To be the leading focused ASEAN bank Leading Focused ASEAN We seek to be We will not be everything to everyone. We shall focus on key We are a local amongst the markets and segments, where we play to win ASEAN bank. leading ASEAN Where wil
Slide 6: We knew our portfolio needed to be reshaped
We knew our portfolio needed to be reshaped Malaysia Indonesia Singapore Thailand Cambodia Digital SME/ Consumer Wealth Wealth SME/ TnG & Commercial & SME Management Management Commercial TNGD 1) Undertake stringent portfolio review Wealth Consumer T&M Consumer Consumer Philippines Management 2) Imp
Slide 7: Asset Composition and Growth
Asset Composition and Growth We have achieved strong growth momentum in our core focus segments Country Year Consumer Commercial Wholesale Dec-19 59% 14% 27% Malaysia 1% ▲ 2% ▲ 3% ▼ Jun-24 60% 16% 24% Dec-19 25% 14% 61% Singapore 8% ▲ 3% ▼ 5% ▼ Jun-24 33% 11% 56% Dec-19 27% 35% 38% Indonesia 6% ▲ 6%
Slide 8: Structured Cost Takeout
Structured Cost Takeout We focused on cost efficiency, achieving RM 1bil cumulative cost savings by FY22 Evolution Analysis RM’mil FY21 Total Cost Cost Base(1) Decrease in cost Increase in cost (611) (195) (382) 9,386 9,386 8,775 8,748 8,938 9,225 FY19 Cost Savings FY20 Cost BAU FY21 Cost Normalised
Slide 9: Realising our Forward23+ Ambitions
Realising our Forward23+ Ambitions We are on-track to meet our Forward23+ ambitions Key Group Forward23+ Shareholder Value Creation Actual Metrics Ambition Annualised FBM 2020 2021 2022 2023 1H24 2024 2024 CIMB TSR (%)* KLCI BAU BAU Guidance 10.7% 11.4% 1H24 +45.4% +18.7% 8.1% 10.2% 2.1% 11.0-11.5%
Slide 10: Evolution of Singapore's Contribution to Group
Evolution of Singapore’s Contribution to Group CIMB SG has outperformed under the Forward23+ plan with increased contribution to CIMB Group across PBT and deposits FY2019 FY2023 1H2024 Group PBT RM RM RM (RM mil) 6,618m 7% 9,541m 5,303m 10% 15% Group Loans RM RM RM (RM mil) 370b 441b 445b 8% 10% 10%
Slide 11: CIMB SG Business Overview
02 CIMB SG BUSINESS OVERVIEW
Slide 12: Our history in Singapore
Our history in Singapore The CIMB brand is 15 years old in Singapore but we have roots in SG dating back to 1947 Ban Hin Lee Bank Singapore branch is established at 52A Circular Road in 1947 and is later acquired by CIMB Group acquires Southern Bank in 2000 Southern Bank 1947 2006 2005 2009 G.K. Goh
Slide 13: Our presence in Singapore today
Our presence in Singapore today We operate with a full banking license spanning 6 business units Group Commercial Group Consumer & & Transaction Group Wholesale Banking Digital Banking Banking Corporate & Consumer Commercial Treasury & Financial Private Investment Banking Banking Markets Institution
Slide 14: Our Singapore strategy: past and present
Our Singapore strategy: past and present We have pivoted from focusing on scale to focusing on returns to deliver greater shareholder value under our Forward23+ strategy Evolution of CIMB SG Strategy 2009-2019 Strategy: Focus on Scale 2020-2024 Strategy: Focus on Returns Adopted a universal bank str
Slide 15: Our financial performance
Our financial performance We have successfully turned around the business, achieved our F23+ targets a year ahead of plan and are on track to deliver a third consecutive year of record performance CIMB SG Financials (2019-1H2024) CIMB SG Business Drivers (2019-1H2024) 584 ~550K F23+ Target 453 463 ~
Slide 16: CIMB Singapore financials (2019-1H2024)
CIMB Singapore financials (2019-1H2024) We have grown revenues at 6.6% CAGR while managing opex growth at 3.3% CAGR and significantly expanded our deposit base especially through CASA SGD 'mil FY19 FY20 FY21 FY22 FY23 1H24 Net interest income 253 197 251 294 340 186 Non-interest income 200 180 158 1
Slide 17: CIMB Singapore key ratios (2019-1H2024)
CIMB Singapore key ratios (2019-1H2024) Optimising our deposit mix and reshaping our portfolio towards higher returns businesses have led to improving ratios across the board FY19 FY20 FY21 FY22 FY23 1H24 Business NIM ~* (%) 1.34% 0.93% 1.17% 1.37% 1.41% 1.41% Loan to Deposit (LDR) (%) 88.8% 81.8% 8
Slide 18: Our awards & achievements
Our awards & achievements We continue to build an award-winning brand in Singapore Asian Banking & Finance Global SME Banking Customer Experience Employee Experience Awards 2024 Innovation Awards 2024 Awards Awards • Strategic Partnership of • Winner of Best SME • Straits Times Best • Certified Grea
Slide 19: CIMB SG Forward23+ Strategy
03 CIMB SG FORWARD23+ STRATEGY
Slide 20: Our Forward23+ Strategy
Our Forward23+ Strategy We charted 5 strategic themes aimed at maximising returns and laying a strong foundation for long term growth Vision Vision bank in SG – To be a niche challenger To be a digital leveraging our ASEAN footprint, niche challenger – bank in SGdifferentiation and customer-centric
Slide 21: Strategic theme #1: Optimise deposit structure (1/2)
Strategic theme #1: Optimise deposit structure (1/2) We diversified our deposit base, doubled down on lower cost deposit engines and significantly improved our CASA ratio Total Deposits Total CASA CASA Ratio S$mil FY15 % FY19 % FY23 % FY15 % FY19 % FY23 % FY15 FY19 FY23 Consumer 4,545 32% 8,019 56%
Slide 22: Strategic theme #1: Optimise deposit structure (2/2)
Strategic theme #1: Optimise deposit structure (2/2) As a result, our cost of deposits has improved over the years resulting in our NIM expanding Benchmark Rates & 2019 vs. 2019 2020 2021 2022 2023 1H2024 Cost of Deposits 1H2024 Daily Average 1M 1.82% 0.63% 0.27% 1.82% 4.01% 3.97% +2.15% SIBOR Daily
Slide 23: Strategic theme #2: Reshape portfolio (1/2)
Strategic theme #2: Reshape portfolio (1/2) We have reshaped our portfolio with higher contributions from segments with higher returns Revenue & Risk-Adjusted Return on Capital (RAROC) by Business 2015-2023 High RAROC Businesses Risk- Adjusted Return on >20% >20% 5-10% >20% >20% 10-20% Capital (RARO
Slide 24: Strategic theme #2: Reshape portfolio (2/2)
Strategic theme #2: Reshape portfolio (2/2) Strong growth momentum from Consumer Banking & SME segments Revenue Breakdown (S$mil) Loan Breakdown (S$bil) % % 1H % % 1H Key business 1H 19-23 Key business 1H 19-23 2019 2020 2021 2022 2023 2019 2024 2019 2020 2021 2022 2023 2019 2024 segments 2024 CAGR
Slide 25: Strategic theme #3: Drive cost efficiency (1/3)
Strategic theme #3: Drive cost efficiency (1/3) We have reduced CIR by 13.6% through targeted cost saving initiatives Cost-to-Income Ratio (%) Cost Saving Initiatives -13.6% Zero based organisation (ZBO) design and restructuring in 2020-2021: reducing spans and 65.9% layers as well as rightsizing ba
Slide 26: Strategic theme #3: Drive cost efficiency (2/3)
Strategic theme #3: Drive cost efficiency (2/3) We invested in digitalisation and automation initiatives to achieve further productivity efficiencies and build competitive advantages Foundational Set-Up Completed Accelerate & Sprint In Progress Bankwide Scale-Up 2021 – 2022 2023 – 2024 2025 – 2030 •
Slide 27: Strategic theme #3: Drive cost efficiency (3/3)
Strategic theme #3: Drive cost efficiency (3/3) We invested in engaging our customers through digital channels resulting in better customer experiences while optimising acquisition and servicing costs Enhanced Clicks mobile app Conversational Banking Digital Lending Propositions 2021 2024 • 68% of c
Slide 28: Strategic theme #4: Strengthen risk management (1/2)
Strategic theme #4: Strengthen risk management (1/2) We have improved our credit risk profile by reshaping our credit portfolio 2019 2020 2021 2022 2023 1H2024 24 13 27 Estimated Credit Losses (S$mil) -15 -0.5 -472 Reshaped credit portfolio 388 Cost of Credit • Pivot to more granular 12 for Loans -1
Slide 29: Strategic theme #4: Strengthen risk management (2/2)
Strategic theme #4: Strengthen risk management (2/2) We undertook a slew of initiatives across 4 core areas to protect the bank and enhance our operational resiliency Threats & Potential Failures Business Continuity Third Party Risk Technology Resiliency Identification • Holistic assessment of Key •
Slide 30: Strategic theme #5: Invest in human capital (1/3)
Strategic theme #5: Invest in human capital (1/3) Our investments in human capital bore fruit with our Organization Health Index (OHI) score improving from bottom quartile (56) to top quartile (80) Benchmark: Top Decile Top Quartile Second Quartile Third Quartile Bottom Quartile Comparison: Quartile
Slide 31: Strategic theme #5: Invest in human capital (2/3)
Strategic theme #5: Invest in human capital (2/3) We engaged extensively with our people, invested in leadership and capability development, and enhanced rewards & recognition to build a high performing workforce and culture Uplifting levels Upskilling & reskilling a future- Enhancing rewards & embe
Slide 32: Strategic theme #5: Invest in human capital (3/3)
Strategic theme #5: Invest in human capital (3/3) Our efforts have culminated in an award-winning culture and workplace Customer centricity Purpose driven organisation We have been awarded the Singapore’s Best Customer Service We have been - Consumer Bank for two years in a row (23/24 & 24/25). The
Slide 33: Looking Beyond Forward23+
04 LOOKING BEYOND FORWARD23+
Slide 34: Beyond Forward23+
Beyond Forward23+ We have 3 levers to propel our CIMB SG franchise to greater heights Strong ASEAN High growth, high Established Network returns portfolio transformation factory We are well-positioned as a hub to We are well-poised to growth in We are well-oiled to transform capture regional flows w
Slide 35: Expanding Our Consumer Banking Presence
05 EXPANDING OUR CONSUMER BANKING PRESENCE
Slide 36: Expanding our Consumer Banking presence (Bancassurance)
Beyond Forward23+ Expanding our Consumer Banking presence (Bancassurance) Market opportunity Our competitive advantages Our track record SG Life Insurance Weighted Premiums (S$bil)) SG Life Insurance Weighted Premiums – Bank Representative (S$bil)) CAGR +4% 1.7 1.6 1.6 5.4 20-23 5.1 4.9 CAGR 4.4 1.3
Slide 37: Expanding our Consumer Banking presence (SG-MY corridor)
Beyond Forward23+ Expanding our Consumer Banking presence (SG-MY corridor) Market opportunity Our competitive advantages Our track record Distribution of Singapore Population (by No. of MY customers in CIMB SG (‘000) Resident Status) 3.2x Non-Resident 1.8mil (31%) 215 186 136 Singapore Singapore 95
Slide 38: Expanding our Consumer Banking presence (Deposits & CASA)
Beyond Forward23+ Expanding our Consumer Banking presence (Deposits & CASA) Market opportunity Our competitive advantages Our track record Total SG deposit & CIMB SG retail deposit balances (S$bil) 629 611 Competitive CASA base rate without multiple 2.4x 571 growth in CASA 543 conditions imposed cus
Slide 39: Turbocharging Our SME Banking Franchise
06 TURBOCHARGING OUR SME BANKING FRANCHISE
Slide 40: Turbocharging our SME Banking franchise
Beyond Forward23+ Turbocharging our SME Banking franchise Market opportunity Our competitive advantages Our track record No. of SME customers (‘000) 2.4% Accessible online banking 2.2x market – incl. seamless online Number of share account opening of SG SMEs 9.0 accounts for MY companies 7.5 310K 5.
Slide 41: Thank You
Thank You MOVING FORWARD WITH YOU
CIMB Group Holdings Berhad — Investor Day (October 2024) on 6ix