KUALA LUMPUR: CIMB Group is optimistic in exceeding all its Target 18 (T18) targets as it entered its final year of the three year strategic plan.
Speaking at the conclusion of its 61st annual general meeting (AGM), group chairman Datuk Seri Nazir Razak said 2017 has been a great year for the bank but 2018 is expected to be even better.
“I believe that 2017 was the year in which CIMB took it to the next level where we hit all our targets and exceed some of them as we successfully strengthened our foundations across multiple dimensions namely customer, capital, cost, culture and compliance, all under the T18,” he said.
“Moving forward, 2018 represents the final sprint of our T18 journey. We remain focused on delivering our T18 programmes and we are cautiously optimistic that we may exceed the targets set.”
To recap, CIMB Group had set a number of target at the start of the T18 initiative which officially begun in 2016.
These include bringing down the cost to income ratio (CTR) to 50 per cent from 58.1 per cent, increasing Common Equity Tier 1 (CET1) from 10 per cent to 12 per cent, increasing the return of equity (ROE) from 8.2 per cent to 11 per cent, and to increase income from consumer and commercial business from 57 per cent to 60 per cent.
When asked about its specific strategy in bringing down the CTR, group chief executive officer Tengku Datuk Seri Zafrul Aziz said the only way to go about it is to bring up its income.
“There will always be cost to running a bank and on average, we see the cost increasing between two to three per cent each year,” said Zafrul.
“The only way to beat this is by increasing our income faster than the rising cost and we are doing this by strengthening our business network across Malaysia and Asean through innovations, collaborations and good customer service.”
The group yesterday became the first bank in Malaysia to waive the Interbank GIRO (IBG) fee of RM0.11 per transaction and Instant Interbank Fund Transfer (IBFT) fee of RM0.53 per transaction performed on its online banking platform, CIMB Clicks, as well as CIMB Clicks and CIMB EVA mobile apps, regardless of transaction amount.
“This initiative is part of CIMB’s effort to drive the usage of digital payments, in support of Bank Negara Malaysia’s cashless society agenda. As such, this fee waiver will be ongoing indefinitely,” said Zafrul.
“By doing this, we do see impact on our non-interest income, but it is an amount that we can live with. At the end of the day, it is not so much about the minimal financial impact but our meaningful support for Bank Negara's initiative.”
CIMB's group digital transactions grew by a compound annual growth rate (CAGR) of close to 40 per cent, and mobile transactions by a CAGR of 90 per cent in the last three years, since it started its digital banking programme under T18.
CIMB Clicks had last year processed 155 million transactions, while CIMB saw the usage of cheques drop by 17.5 per cent also in the same period.