CIMB group CEO Novan Amirudin: We’re also been very active in terms of the local Singapore market. Photo: Mohd Izwan Mohd Nazam/The Edge Malaysia
Novan, speaking at the bank’s recent regional media day, also pointed to Singapore’s role as an “established treasury centre” where a lot of multinational and regional companies are based. “We are using it as an important wealth as well as a treasury hub to connect the wider Asean business for us. But on top of that, we’re also been very active in terms of the local Singapore market,” he says.
He continues: “We service all three client segments today, whether retail, commercial and SMEs (small- and medium-sized enterprises), including large corporates, you know, we bank a lot of the large, established Singapore names, and that will continue to be a focus area for us moving forward.”
See also: Why do populist strongmen love low interest rates?
Niche challenger
Headquartered in Kuala Lumpur and listed on the Bursa Malaysia, CIMB Group has a presence in a total of seven countries in Asean and in China, Hong Kong and the UK. For CIMB Singapore, the focus is on being a “niche challenger” given the strong competition within the city-state, especially from larger local banks such as DBS Group Holdings, Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB).
CIMB in Singapore will not aim to cover every single market segment. Rather, it will choose which ones to play in, where it has a competitive advantage.
See also: UBS CEO says tariff impact on inflation, Fed still unclear
As a challenger bank in Singapore, another way CIMB sets itself apart is by tapping on “the strength of its Asean network” and remaining closely attuned to its customers’ needs, which is to provide simpler banking, better value and faster access to solutions that work, says a CIMB Singapore spokesperson.
One of the key propositions is to provide competitive foreign exchange (forex) rates and charge zero fees for individuals and businesses in the city-state. Given that it is a Malaysian-headquartered bank, it is well poised to service the thousands of Malaysians residing in Singapore who need to send money across the Causeway regularly.
Between 2020 and 2024, CIMB has seen a six-times increase in SGD-MYR (Singapore dollar to Malaysian ringgit) transaction volumes and a three-times growth in its Malaysian customer base in Singapore.
In bancassurance, CIMB is the leading foreign bank in Singapore with a market share of 6%. The bank’s open architecture model gives customers the option to choose from seven leading insurance partners, ensuring they receive the best value policies tailored to their unique needs and goals.
Additionally, the bank competes by focusing on its customers’ need for speed, reliability and convenience via its mobile-first, no-frills approach. For CIMB, banking should be “intuitive” and not filled with a “maze of jargon or friction”.
CIMB’s customers are also able to access a full suite of fixed deposit services round the clock through the bank’s mobile app, with dedicated relationship managers for its preferred and business clients.
The vast majority, or 94%, of the bank’s active users now rely on its mobile app more frequently for their banking needs, with financial transactions — local and international — up by over 257% from 2022 to 2024. The mobile app has also contributed to the bank’s overall topline with a 334% increase in digital revenue from 2022 to 2024.
To stay ahead of Singapore and the region’s corporate and economic trends, click here for Latest Section
Regular income for consumers; ESG-focused SMEs
In CIMB Singapore, the bank’s customers prefer bonds and unit trusts that primarily focus on fixed income strategies. They also prefer globally diversified funds offering regular dividend payouts.
The bank understands that income remains a key priority for its customers, many of whom prioritise stability and resilience of their portfolios. CIMB is also seeing increased interest in SGD-hedged unit trusts, as investors look to mitigate the impact of currency volatility.
In recent years, the active marketing of environmental, social and governance (ESG) credentials has been primarily undertaken by multinational corporations; however, the bank is also seeing SMEs increasingly prioritise practices related to environmental, social, and governance, as they strive to meet growing customer and supply chain expectations. More of these businesses are also seeking to comply with evolving global regulations and secure access to sustainable financing.
From CIMB’s perspective, organisations, especially forward-looking ones, including SMEs, are recognising that being ESG-aligned gives them more business opportunities.
According to CIMB, embracing ESG offers SMEs a competitive edge by enhancing their reputation, improving operational efficiency through cost savings, such as reduced energy consumption and attracting talent, particularly younger professionals who increasingly seek employers with strong sustainability values.
JS-SEZ a ‘lot more conducive’
CIMB is also positioning itself as a key financier for the Johor–Singapore Special Economic Zone (JS-SEZ). In April this year, CIMB announced a RM10 billion ($3 billion) commitment to drive growth over the next three years.
When asked if he had further details, Novan says the bank is not specifying any sector as yet. However, he says CIMB will follow the foreign direct investments (FDIs) that have been going into popular sectors into the JS-SEZ, such as data centres, although the bank is not restricting its investment, but will “cover all market segments”.
Beyond data centres, Novan also sees opportunities with the family offices in the financial zone.
Finally, real estate and business in the areas near the Johor Bahru to Singapore rapid transit system (RTS), the 4km transit system connecting Johor Bahru’s Bukit Chagar Station with Singapore’s Woodlands North Station on the MRT, are also sectors to look at.
CIMB’s stance reflects a broader optimism that the timing of the JS-SEZ is a “lot more conducive” compared to previous attempts at cross-border integration.
This is attributed to the wider “cost divergence” between Singapore and Malaysia after the Covid-19 pandemic, which has led to capacity constraints. “It’s not about how much you can pay, [but] the supply is just not there,” says Chu Kok Wei, CEO of CIMB’s group wholesale banking and corporate treasurer. By Peninsular Malaysia’s standards, Johor is not cheap. Yet, the cost differential with Singapore continues to make a “viable business case,” Chu continues.
Amid the ongoing geopolitical tensions and tariffs, now is also an opportune time for the economic zone to flourish. “JS-SEZ is not about relocating solely between [the] industrial zones of Singapore into Johor,” says Chu.
“The geopolitical developments globally also prompted a lot of FDI (foreign direct investment) inflows into Asean. Naturally, [the] SEZ becomes one of the attractive potential destinations for that,” he adds.
For instance, Chu cited the “fair bit” of financial market flows being redirected into the SEZ in the form of the Forest City Special Financial Zone, announced in August 2023. The special financial zone is a part of the broader JS-SEZ and is designed to attract investments with incentives such as 0% to 5% corporate tax for companies and a flat income rate of 15% for knowledge-based workers. “All these are making the prospect of [the] SEZ this time round, a lot more promising [and] conducive,” he says.
As a “full service” bank in this homeground, CIMB fully intends to position itself as the go-to bank for both businesses and consumers operating and living in the JS-SEZ. CIMB will serve all spectrums, from SMEs to commercial business banking needs, as well as MNCs.
This means that the bank is able to facilitate conversations in terms of fresh FDI flows, which tend to be anchored by large corporations, and these corporations require a whole ecosystem of service providers, suppliers and so on, he says.
1HFY2025 results
CIMB’s expansion plans come as the group reported a resilient set of numbers for the 1HFY2025 on Aug 29. For the six months ended June, the bank’s net profit fell by 0.9% y-o-y to RM3.86 billion due to macroeconomic headwinds, increased market volatility and forex translation effects. On a constant currency basis, net profit for the period would have been up by 3.3% y-o-y. Revenue fell by 1.16% y-o-y to RM11.1 billion while earnings per share (EPS) fell to 35.96 sen from 36.51 sen previously.
CIMB’s annualised return on average equity (ROE) stood at 11.1%. An all-cash first interim dividend of 19.75 sen per share was declared, translating to a payout ratio of 55.5% Its return on average equity (ROE) stood at 11.1%.
“Our well-capitalised balance sheet not only ensures the resilience of our franchise but also provides us with the flexibility to execute future growth and strategic priorities. This allows us to continue delivering sustainable returns while supporting future capital distribution, reaffirming our commitment to create long-term sustainable shareholder volume,” adds Novan.
