CIMB forecasts ‘considerably lower’ provisions for loans in FY21

KUALA LUMPUR (February 26): CIMB Group Holdings Bhd expects its loan provisions to be lower – with a forecast of 80 to 90 basis points (bps) – for the year ending December 31, 2021 (FY21 ).

Last year, loan provisions stood at 146 basis points.

“We expect significantly lower provisions in our segments, as well as in key operating markets – Malaysia, Indonesia, Singapore and Thailand, reflecting the recovery,” said CIMB Group Chief Financial Officer Khairul Rifaie , during the bank’s virtual briefing on FY20 financial results.

“In Malaysia itself, in 2020 we were impacted by the provisioning of management overlays, and we don’t expect that to happen again in 2021,” Khairul said.

Thus, he said the bank is expected to see a significant improvement in provisioning levels for Malaysia in personal, wholesale and commercial banking.

For the 2020 financial year, the group’s gross depreciation ratio (GIL) stands at 3.6%. But, for Malaysia, GIL fell to 2.5%.

CIMB shares closed unchanged at RM 4.33 today, valuing the bank at RM 42.97 billion. The meter gained around 49% from last year’s low of RM 2.90 in November.

Read also:
CIMB Fourth Quarter Net Profit Rises 10.6% to RM 215 Million, Declares Dividend of 4.8 Sen
CIMB targets 4% to 5% loan growth in 2021

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