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  • CIMB Expands Wealth Services into Singapore and Thailand, Targeting Southeast Asias Rising Affluent Class

    CIMB Expands Wealth Services into Singapore and Thailand, Targeting Southeast Asias Rising Affluent Class

    CIMB Group, Malaysia’s second-largest bank in terms of assets, has announced its intention to expand its private wealth business to Singapore and Thailand by the end of the year. This move is part of a larger plan to double the bank’s wealth assets under management by 2030.

    Targeting Southeast Asia’s Growing Affluent Segment

    Haniz Nazlan, the CEO of group consumer banking at CIMB, revealed on Monday that this expansion activity is targeting the rapidly increasing affluent segment in Southeast Asia. This strategic move follows the successful launch of the bank’s private wealth business in Indonesia earlier in the year and in Malaysia on the same day.

    According to Nazlan, the ASEAN economy, worth US$4 trillion, has been experiencing robust annual economic growth rates of approximately 4%, which is significantly higher than many developed markets. This economic dynamism is expected to stimulate a 5% to 6% annual increase in the region’s affluent population. Furthermore, the middle class is projected to comprise between 65% and 70% of the ASEAN population by 2030.

    Factors such as growing incomes, escalating cross-border investments, and a notable surge in intergenerational wealth transfers are propelling the market.

    A New Service for High Net-Worth Clients

    Daniel Cheong, CIMB’s head of consumer banking for Malaysia, revealed that the new private wealth service is tailored to clients who have at least RM1 million ($244,612) in assets under management. This offering is positioned above CIMB Preferred, the bank’s mass-affluent priority banking segment, which requires a minimum of RM250,000 in assets.

    CIMB’s Private Wealth service offers clients dedicated relationship managers, treasury solutions, investment advisors, customized investment products, succession planning, and digital wealth capabilities.

    Nazlan noted that affluent clients are progressively seeking advice that goes beyond mere investment product selection. He explained that they want guidance on wealth protection, preparation of their children’s futures, access to global opportunities, and making informed decisions in an unpredictable world.

    Nazlan disclosed that CIMB’s wealth assets under management (AUM) were approximately RM250 billion in the preceding year. However, he refrained from providing interim growth targets or customer acquisition figures, stating that it is still the early stages of the Private Wealth proposition’s rollout.

    Questions & Answers

    What is CIMB Group’s plan for its private wealth business?
    CIMB Group plans to expand its private wealth business to Singapore and Thailand by year-end, aiming to double its wealth assets under management by 2030.

    Who are the target clients of the new CIMB private wealth service?
    CIMB’s private wealth service targets high net-worth clients who have at least RM1 million ($244,612) in assets under management.

    What are the key services offered by CIMB’s Private Wealth service?
    CIMB’s Private Wealth service offers dedicated relationship managers, investment advisors, treasury solutions, succession planning, customizable investment products, and digital wealth capabilities.

  • U Mobile, CIMB Sign MoU to Support 5G Network Rollout

    U Mobile, CIMB Sign MoU to Support 5G Network Rollout

    U Mobile CEO, Wong Heang Tuck, highlighted the company’s enthusiasm for this strategic partnership with CIMB for the 5G rollout, emphasizing CIMB’s shared commitment to innovation and digital growth. He noted that the financial support would enable a fast, cost-effective deployment, benefiting businesses, consumers, and the public sector.

    Chu Kok Wei, CEO of Group Wholesale Banking, CIMB Group, said, “In line with our shared goal of nation building, CIMB is pleased to support U Mobile in its efforts to connect Malaysians and spur digital innovation through the power of 5G. CIMB is also ready to offer a holistic range of bespoke products and services apart from financing, extending to diverse areas including investment banking and treasury that will spark further innovation and accelerate growth both for U Mobile and Malaysia.”

    Both Tuck and Wei signed the MoU at U Mobile’s Corporate Offices in Berjaya Times Square. The ceremony was attended by U Mobile CFO, Sandy Tsang, and Denise Wong, Head of Corporate Coverage Malaysia at CIMB Group.

    This MoU builds on a longstanding financial relationship between the two companies, including CIMB’s participation in a MYR 1.2 billion facility for U Mobile in 2021, which was increased to MYR 1.4 billion in 2023.

  • DHL Express and CIMB join forces to reduce CO₂e through sustainable aviation fuel

    DHL Express and CIMB join forces to reduce CO₂e through sustainable aviation fuel

    DHL Express has signed an agreement with CIMB Group Holdings Berhad (“CIMB” or “the Group”) to welcome the banking group onboard its GoGreen Plus programme.

    The partnership enables CIMB to leverage the use of sustainable aviation fuel (SAF) to mitigate the CO2e emissions associated with its international shipments. Through the partnership, CIMB will deploy the programme across Malaysia and Singapore.

    CIMB recognises the importance of aligning business interests with climate practice. In September 2022, the Group announced a net-zero by 2050 goal for Scope 3 emissions, emphasising the indirect greenhouse gases generated through transportation and distribution activities. DHL’s GoGreen Plus service helps to facilitate a pathway towards cleaner operations and contributes to scaling the wider SAF ecosystem.

    SAF is considered the aviation industry’s most promising means of decarbonisation. Made from alternative raw materials such as used cooking oil, waste, and hydrogen, SAF cuts approximately 80 percent of carbon emissions for air transport shipments over its lifecycle compared to conventional jet fuel. In collaboration with DHL Express, CIMB expects to lower the carbon emissions of its time-definite international air shipments from Malaysia and Singapore by 20 percent via DHL. An independent auditor, Société Générale de Surveillance, verifies the greenhouse gas emission reductions to be counted against CIMB’s Scope 3 carbon emission footprint.

    “Many of our customers look at sustainability as a business imperative today. In Asia Pacific alone, more than 12,000 customers have signed up for our GoGreen Plus service and this number continues to grow consistently,” said Ken Lee, CEO DHL Express Asia Pacific. “As a leading express logistics company, we always connect people and businesses across borders. GoGreen Plus serves as a vital avenue for businesses to cut carbon emissions, and we are convinced more will come on board.”

    “SAF is widely acknowledged as a truly viable route to decarbonising the aviation sector. There is still significant progress to be made, as SAF makes up only 0.1 percent of aviation fuel consumed today. We are impressed with the leadership CIMB has demonstrated in the sustainability space and we are delighted to have CIMB partner us for this important initiative. This motivates us to accelerate efforts to promote SAF availability, accessibility, and affordability so that our customers realise their environmental ambitions,” said Julian Neo, Managing Director of DHL Express Malaysia and Brunei.

    “Sustainability is a key focus at CIMB and central to that are our 2050 net-zero commitments. In our roadmap to achieve these targets, we have long advocated the need to strategically partner and drive innovative solutions. CIMB is pleased to be partnering DHL in their sustainable fuel proposition that will help us mitigate our Scope 3 carbon emissions and in that regard, help us get closer to our 2050 net-zero commitments. DHL’s innovative solution in bringing such an option to its key clients is commendable and will accelerate the commercialisation of such technology,” said Gurdip Singh Sidhu, Chief Executive Officer of CIMB Malaysia and CIMB Bank Berhad.

    Launched in February 2023, GoGreen Plus is among the DHL Group’s initiatives to achieve net-zero missions by 2050, which is made possible by three of the most significant SAF agreements with bp, Neste, and World Energy. The air freight network accounts for around 70 percent of the company’s carbon footprint, so sustainable air transportation solutions are crucial for greener logistics.

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  • CIMB Restructuring Sees Lay-Offs in Singapore

    CIMB Restructuring Sees Lay-Offs in Singapore

    The Malaysian lender is revising its strategy to emphasise sustainable growth, in line with the group’s vision to be a «leading focused Asean bank.»

    CIMB Singapore is laying off staff and will close its Orchard Road branch as part of a restructuring exercise, which will see it optimise its functional set-up and leverage its group strengths through regionalization.

    These will make us more resilient, more productive and better positioned for growth going forward,» CIMB Singapore chief executive Victor Lee said in an internal memo.

    CIMB Singapore will be positioned as an Asean banking hub for the group, with a focus on wealth management, SME (small and medium-sized enterprises) banking, regional corporates and treasury and markets. According to the report, the bank had 1,200 staff in Singapore. Only its Raffles Place branch will remain following the exercise.

    Singapore is a core and important market to the CIMB Group, and we will continue to invest in our key growth areas, CIMB Singapore said in a statement.

    The bank let go of three of its business heads in Singapore in November 2020, following a review of its operations that cited the poor performance brought about by the pandemic.

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  • CIMB Restructures Singapore Business

    CIMB Restructures Singapore Business

    The Malaysian bank is letting go of three business heads in Singapore, following a review of its operations.

    Changes are afoot at CIMB Singapore, as the bank has moved to ax its consumer, commercial and corporate banking heads: Josandi Thor, Yong Jiunn Run and Lai Ven-Li, citing an internal memo viewed by the portal.

    The bank cited the poor performance brought about by the pandemic, which required it to reshape its business portfolios to drive cost efficiency across the bank. The bank said it recently adapted its Forward23 five-year growth plan, launched in 2018, in response to the pandemic.

    CIMB Singapore’s posted losses of 939 million ringgit ($229.42 million) for the first half of the year, largely due to impairments.

    However, there have been talks of restructuring since the middle of the year and the possibility of wider layoffs.

    An observer told the publication that CIMB Singapore CEO Victor Lee, who was appointed earlier this year, was looking to restructure the senior management team and bring in people he had previously worked with.

    Given the business pivots moving forward, we have carefully deliberated with group management on the optimal structure to deliver our Forward23+ strategy. This entails streamlining the leadership structure and reducing the CEO’s span of control to focus on key areas impacting the business, Lee said in the email.

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  • CIMB Appoints Group CEO

    CIMB Appoints Group CEO

    He succeeds Zafrul Tengku Abdul Aziz, who resigned as group CEO of CIMB Group Holdings and CEO of CIMB Bank in March to join the Malaysian cabinet as finance minister.

    CIMB Group, Malaysia’s second-largest financial services provider by assets, has appointed Abdul Rahman Ahmad as group chief executive officer/executive director for CIMB and CEO/executive director of CIMB Bank, effective June 10, the bank announced in a statement.

    Abdul Rahman brings more than two decades of experience in leadership roles across several industries, including as CEO of Malaysian Resources Corporation, CEO of Media Prima, CEO of government-linked private equity firm Ekuiti Nasional, and president and most recently as group CEO of asset management firm Permodalan Nasional.

    As the industry undergoes fundamental changes, he will bring a fresh perspective to lead CIMB’s continued transformation and build upon its successful ASEAN franchise, CIMB chairman Mohd Nasir Ahmad said in the statement.

    CIMB offers consumer banking, commercial banking, investment banking, Islamic banking, and asset management products and services. Headquartered in Kuala Lumpur, the Group is present in all 10 Southeast Asian nations, with 697 branches as of March 31, 2020.

    Beyond Southeast Asia, the Group has market presence in China, Hong Kong, India, Korea, the U.S., and U.K. CIMB Group operates its business through three main brand entities, CIMB Bank, CIMB Investment Bank, and CIMB Islamic. CIMB Group is also the 92.5 percent shareholder of Bank CIMB Niaga in Indonesia, and 94.8 percent shareholder of CIMB Thai in Thailand.

  • CIMB Singapore Partners Security Token Offerings Platform

    CIMB Singapore Partners Security Token Offerings Platform

    The bank’s partnership with iSTOX will expand private capital markets access for its clients.

    CIMB Singapore is partnering ICHX Tech to allow its clients in the Asean region to raise funds in a faster, more flexible and efficient way on its blockchain-enabled platform, a press release on Wednesday announced.

    The firm operates Singapore-based platform iSTOX, which supports the issuance, custody and secondary trading of digitized securities using advanced smart contracts and distributed ledger technology to streamline the process.

    We are pleased with this partnership to provide our clients with an alternative digital solution as digitization is one of the pillars that we are looking at to build aggressively within the bank in the next few years, Victor Lee, CEO of CIMB Bank Singapore, said in the statement.

    Founded in 2017, iSTOX is backed by Singapore Exchange (SGX), Temasek Holdings subsidiary Heliconia, Japan’s Tokai Tokyo Financial Holdings, Thailand’s Kiatnakin Phatra, and South Korea’s Hanwha Asset Management.

  • CIMB Chief Steps Down To Take Finance Minister Role

    CIMB Chief Steps Down To Take Finance Minister Role

    CIMB Group Holdings announced on Monday that its chief has relinquished his post on Monday, as he has been appointed the new Finance Minister in Malaysia.

    Zafrul Tengku Abdul Aziz , who has been appointed the new Finance Minister on Monday, has resigned as group CEO of CIMB Group Holdings and CEO of CIMB Bank. He has also resigned from all other board positions on the same date, the lender said in a statement on Monday.

    The appointment of Zafrul was announced by Prime Minister Muhyiddin Yassin when he unveiled his new Cabinet. Tengku Zafrul has served the Group for six years when he re-joined in 2014. He has done an outstanding job, shaping CIMB’s transformation under our T18 and Forward23 strategic plans, said Chairman of CIMB Group Holdings Mohd Nasir Ahmad.

    In his place, the board has appointed Omar Siddiq, currently the Group Chief Operating Officer, as Officer-in-Charge for CIMB Group and CIMB Bank Berhad, marking a start in the group’s succession plan.

    CIMB Group is Malaysia’s second-largest financial services provider by assets, offering consumer banking, commercial banking, investment banking, Islamic banking, and asset management products and services. Headquartered in Kuala Lumpur, the Group is present in all 10 Southeast Asian nations (Malaysia, Indonesia, Singapore, Thailand, Cambodia, Brunei, Vietnam, Myanmar, Laos and Philippines), with 702 branches as at 31 December 2019.

    Beyond Southeast Asia, the Group has market presence in China, Hong Kong, India, Korea, the U.S., and U.K. CIMB Group operates its business through three main brand entities, CIMB Bank, CIMB Investment Bank, and CIMB Islamic. CIMB Group is also the 92.5 percent shareholder of Bank CIMB Niaga in Indonesia, and 94.8 percent shareholder of CIMB Thai in Thailand.

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  • CIMB Bank Philippines Partners With Jumio

    CIMB Bank Philippines Partners With Jumio

    CIMB Bank Philippines’ all-digital bank has partnered Jumio, a provider of AI-powered end-to-end identity verification and authentication solutions to provide a simple, hassle-free and convenient digital onboarding solution to Filipinos.

    Jumio’s identity verification solution uses machine learning, AI, certified liveness detection and face-based biometrics to ensure the person behind a digital transaction is who they say they are by matching a user’s live selfie with the photo shown on their government-issued ID.

    Our partnership with Jumio has been integral in achieving our milestones so far as an all-digital bank in the Philippines to deliver a safe and secure banking experience. We are very grateful to have them as an ally in bringing Filipinos closer to financial inclusion, said Vijay Manoharan, CIMB Bank PH CEO in a statement on Tuesday.

    In its first full year of formal operations, CIMB Bank Philippines (CIMB Bank PH) signed in almost 2 million Filipinos via the CIMB Bank PH digital platform, 30 percent of which are first-time customers to a bank. CIMB Bank PH is part of the CIMB Group, which has a presence in over 16 global markets.

    The all-digital bank offers one of the most attractive savings interest rates of 4 percent, with zero transaction fees and minimum balance. With the bank’s digital proposition, it takes only 10 minutes to open a safe and secured account and 10-minute approval response for personal loans up to Php 1 million.

    CIMB Bank PH’s mobile app integrates Jumio’s AI-driven identity verification technology to provide a safe, secure and fast digital onboarding experience. What used to take 15 minutes with a video KYC process now takes less than five minutes, resulting in an increase in conversions. «In the Philippines and across the greater APAC region it’s becoming increasingly important for banks to offer a streamlined digital onboarding process,» said Jumio CEO Robert Prigge.

    Leveraging advanced technology including augmented intelligence, AI, biometrics, machine learning, certified 3D liveness detection, and human review, Jumio helps organizations meet regulatory compliance including KYC, AML, and GDPR and definitively establish the digital identity of their customers.

    Based in Palo Alto, Jumio has verified more than 200 million identities issued by over 200 countries and territories from the real-time web and mobile transactions. Jumio’s solutions are used by companies in the financial services, sharing economy, digital currency, retail, travel, and online gaming sectors.

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  • CIMB Singapore Appoints CEO

    CIMB Singapore Appoints CEO

    A corporate and retail banking stalwart replaces Mak Lye Mun, who retires after 10 years at the helm.

    CIMB Singapore has appointed Victor Lee as chief executive officer, the Malaysian bank announced on Thursday.

    With the new Industrial Revolution 4.0, we shall need to anchor down on partnerships, technology; customer obsession will be core, and an equally important sustainability agenda, Lee said about his priorities.

    He will concurrently hold the role of CEO of CIMB Group Commercial Banking, and will be a member of the CIMB Group’s senior management team.

    Lee joined CIMB in January 2019 as the bank’s CEO of group transaction banking, based in Malaysia. Prior to joining CIMB, Lee was executive vice president at Fullerton Financial Holdings for three years.

    According to his LinkedIn profile, Lee began his banking career in 1994 at DBS Bank. He has also held roles at UOB, Standard Chartered Bank, Citi and Sumitomo Mitsui.

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  • CIMB Ties Up With SESAMi Holding

    CIMB Ties Up With SESAMi Holding

    CIMB Bank Singapore branch on Thursday announced a collaboration with SESAMi Holding to finance digital invoices under an automated workflow.

    Suppliers on SESAMi Holding’s platform will be paid immediately on their outstanding invoices within two business days, as soon as they are on-boarded on to the supply-chain financing program, CIMB Bank and SESAMi Holdings said in a joint statement. SESAMi Holding is an e-procurement platform in Singapore serving the supply chain needs for customers like Singtel, SATS, SIA, and SRC.

    Capital Match, which was acquired by SESAMi Holding, is the re-financing arm leading this initiative. Customer experience is one of our primary focus and the collaboration with SESAMi-Capital Match presents another scalable avenue for us. This is aligned with the government’s framework for e-invoices and call for companies to keep up with innovation, said Victor Lee, CEO of CIMB Group Commercial Banking in a media statement on Thursday.

    Capital Match will be reaching out to the supplier community to initiate this program. «The funding process will be extremely sped up through leveraging on our Early Payment System (EPS) which was launched earlier this year for the SESAMi supplier community. With the supply-chain financing, suppliers only need to submit minimal documents to be on-boarded under the program,” said Sharath Singh, commercial director of Capital Match.

    Our objective is to ensure a cost-efficient solution and non-recourse working capital funding option that supports our customers’ growth, said Lai Ven Li, head of corporate banking at CIMB Singapore.

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  • CIMB Wants A Bigger Bite Of Singapore SME Banking Share

    CIMB Wants A Bigger Bite Of Singapore SME Banking Share

    CIMB Bank plans to double its market share from 3 percent to 6 percent by 2021 for its small- and medium-sized enterprise (SME) banking business in Singapore.

    One of the lender’s efforts to do so is the launch of its Asean-China Halal Corridor initiative last year, which is a trade network linking halal businesses across China and the region. The initiative – which encompasses agribusiness, cosmetics, food and beverage, fashion and pharmaceuticals – has seen a growing interest among SMEs here, with strong participation in a recent CIMB halal corridor workshop.

    Among the segments that we see (venturing abroad), a lot of cross-border SME regional flows are manufacturing and trade, F&B (food and beverage) including the halal market, and the agricultural commodity sector, said Yong Jiunn Run, head of CIMB commercial banking.

    China’s halal sector is expected to reach $1.9 trillion by 2021, and there is a potential customer base of 266 million in ASEAN and China. Along the process of aiding F&B companies to obtain halal certification, the bank found that this group of SMEs usually proceeds to obtain Islamic financing to tap potential Muslim investors, giving a lift to its SME banking segment.

    Since 2014, the Malaysia-headquartered bank has seen a take-up rate among SMEs for Islamic financing grow by more than 48 percent per annum in the past five years.

    Besides tapping on Islamic finance, the bank recently refreshed its current account offering for businesses, also known as CIMB BusinessGo (BizGo), to provide a unique offering.

    First launched in January 2017, the new bundle aims to address SMEs’ needs in the market that are not being met by the current incumbents, said Ian Chan, CIMB Bank Singapore’s co-head of transaction banking and regional head of digital banking.

    New features include free FAST (Fast And Secure Transfers) transactions, best forex rates guaranteed for transfers to Malaysia, and interest rates of up to 1.88 percent per annum, amongst the most competitive in the market. It’s a product we revamped for two reasons – first and foremost, it’s CIMB’s 10-year anniversary in Singapore, Chan said.

    Secondly, we also want to shout out to the market that we want to grow our SME segment and help our clients to expand their businesses into ASEAN.

    While CIMB is evaluating an application for the digital banking licenses that are up for grabs in Singapore, Yong is against the idea of pursuing the license just for the sake of it.

    If you want to go into the digital bank arena, what customer pain points are you trying to solve? That’s very key as it goes back to basics. If those basics can be achieved without going digital, then what do you really want to achieve? he asked.

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  • CIMB Niaga partners Liquid Group to support Bank Indonesia’s QR Code standardisation

    CIMB Niaga partners Liquid Group to support Bank Indonesia’s QR Code standardisation

    PT Bank CIMB Niaga Tbk (“CIMB Niaga”) and Liquid Group today announced a strategic partnership to spearhead cross-border QR payment acceptance between Singapore and Indonesia. The partnership was initiated through their joint participation in Bank Indonesia’s Quick Response Indonesian Standard (QRIS) trial for cross-border payment transactions. The QRIS trial was conducted on May 23, 2019 using the CIMB Niaga’s digital banking product “Go Mobile” carried out at selected merchants located at Terminal 3, Singapore Changi Airport.

    Slated to launch in the 3PrdP quarter of 2019, CIMB Niaga and Liquid Group will enable the acceptance of participating QRIS compliant payment apps and e-wallets at Singapore Changi Airport through Liquid’s integrated QR payments and marketing infrastructure launched back in April this year.

    CIMB Niaga and Liquid Group have successfully completed their proof-of-concept with CIMB Niaga’s Go Mobile application and QRIS compliant payment apps and e-wallets. With the integration of Bank Indonesia’s QRIS code into Liquid Group’s cross-border payments platform, Indonesian travellers will be able to use their preferred local payment apps to make purchases at Changi Airport.

    Furthermore, CIMB Niaga and Liquid Group will be looking at opening the Singapore – Indonesia corridor for QR payments, enabling the acceptance of Singapore’s local payment apps and e-wallets at participating merchants in Indonesia.

    Lani Darmawan, Consumer Banking Director, CIMB Niaga, commented: “We are honoured to be the first bank in Indonesia given the opportunity by Bank Indonesia to conduct a cross-border QRIS payment trial. We believe that this initiative will greatly benefit our customers who can enjoy the ease of transacting abroad, starting with Singapore’s Changi Airport, using our Go Mobile QR app. This also offers a perfect solution to our customers who may not travel aboard with credit cards or large amounts of cash. We see great potential in the adoption of QRIS-supported cross-border payments with an increasing number of people travelling aboard.”

    Lani added:” The Go Mobile application will offer customers an attractive and competitive exchange rate at the point of payment, with the option to draw funds from their savings accounts, e-wallets and credit cards.”

    Jeremy Tan, Chief Executive Officer, Liquid Group, commented: “Accelerating the adoption of QR payments across borders is our key mission and we appreciate the vote of confidence given to us by CIMB Niaga in using Liquid Group’s integrated payments and marketing infrastructure at Changi Airport for their QRIS trial. Further to opening up the Singapore – Hong Kong corridor for QR payments last month, we are thrilled to now offer Indonesian consumers the convenience and benefit of cross-border QR payments starting with those stopping over at Singapore Changi Airport. We look forward to expanding the acceptance of QR payment apps and e-wallets from both Singapore and Indonesia on our cross-border payment platform.”

    Ms Teo Chew Hoon, Group Senior Vice President of Airside Concessions at Changi Airport Group, commented: “We continuously find new ways to elevate the shopping experience for our passengers and make their payment journey a frictionless one.  This collaboration with Liquid Group and CIMB Niaga will make Changi Airport the first retail destination to spearhead the acceptance of cross-border QR payments using Liquid Group’s first-of-its-kind unified QR payment infrastructure.”

    Liquid Group and Joint Electronic Teller Services Limited (“JETCO”) has also announced a strategic partnership to enable cross-border QR payment acceptance in Singapore and Hong Kong earlier in May, a month after the launch of the world’s first integrated QR payments and marketing infrastucture at Changi Airport back in April 2019.

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  • CIMB IB Research expects higher operating costs

    CIMB IB Research expects higher operating costs

    CIMB Investment Bank Research (CIMB IB Research) has retained its “reduce” call on AirAsia Group Bhd as it forecasted the company to face higher operating costs and gearing levels until 2021.

    The research house lowered its target price for AirAsia to RM1.50, from RM1.82 previously, as it expects lower core earnings per share and dividend of 13 sen.

    At 11.00am, AirAsia was trading down 1 sen or 0.38% at RM2.64 with 1.55 million shares transacted. Its market capitalisation stood at RM8.86 billion.

    In a note today, CIMB IB Research analyst Raymond Yap pointed out that AirAsia had sold 79 aircraft to lessor BBAM Ltd Partnership in 2018 and is expected to sell a further 25 planes to lessor Castlelake LP by the third quarter of this year.

    Given this, Yap explained that together with other existing operating lease aircraft, AirAsia is expected to capitalise RM11.8 billion worth of borrowings related to the operating leases in financial year 2019, effectively bringing back to the balance sheet what had previously been off-balance sheet.

    “The impact would be to raise reported gross gearing of 19% in FY18 to 198% on a pro forma basis after MFRS 16.

    “The overall impact to P&L (profit and loss) earnings from the above sale and leasebacks (S&LB) is negative because AirAsia would have to pay for the lessors’ profit margin as well as provide for a higher level of maintenance charges based on lessors’ conditions for lease returns, which tend to be strict. The net result would be a squeeze on AirAsia’s profit margins,” he said.

    Yap added that with the squeeze in profitability, AirAsia will experience greater operating leverage from unexpected changes in fuel prices, exchange rates, competitive dynamics, and airport taxes and levies.

  • CIMB partners SimplySiti on halal beauty biz

    CIMB partners SimplySiti on halal beauty biz

    CIMB Islamic Bank Bhd and local beauty brand SimplySiti have announced a collaboration that will see CIMB Islamic enabling SimplySiti to expand its halal beauty care business beyond Malaysian borders. The homegrown brand will also leverage the end-to-end support of the CIMB-Asean Halal Corridor and CIMB’s strong regional network, to meet the demand for quality halal beauty, cosmetics and skincare products across the region.

    CIMB Group Islamic banking CEO Rafe Haneef said for any homegrown business and SME, opportunities for growth are aplenty but the challenge is always on how to scale up.

    “This is where CIMB Islamic’s expertise, the CIMB-Asean Halal Corridor and CIMB’s regional network provide a strong value proposition to our customers. Through this collaboration, we are excited to facilitate SimplySiti’s move into its next growth phase by reaping the vast halal business opportunities within Asean,” he said.

    The CIMB-Asean Halal Corridor is an enhanced trade network linking halal businesses with trade infrastructure and ecosystems across Asean to take advantage of increasing demand for halal products in the region and beyond.

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