KUALA LUMPUR (Sept 30): When Datuk Abdul Rahman Ahmad came on board as CIMB Group Holdings Bhd's group chief executive officer in June 2020, it was a point in time when the country’s second largest banking group by assets had been lagging behind the industry on a number of key financial metrics, particularly its return on equity (ROE). 

The pressure was on for him to remedy the situation.

CIMB’s cost-to-income ratio was one of the highest in the industry. 

Its Common Equity Tier-1 ratio — a key measure of a bank’s capital strength and resilience — was not on a par with peers, and there were periodic incidents of elevated credit cost. 

Notably, the ROE, a measure of profitability, had been declining. The group's ROE hit a low of 2.1% in 2020, the first year of the pandemic, compared with Malayan Banking Bhd’s (Maybank) 8.1%, Public Bank Bhd’s 10.7%, and RHB Bank Bhd’s 7.7%.

Adding to the challenges was the fact that Abdul Rahman, formerly the head honcho at Permodalan Nasional Bhd, did not have a banking background. Hence, it was going to be a steep learning curve for him.

Just over three years on, it’s a completely different story, as there has been marked improvement in CIMB’s numbers and financial metrics. Tellingly, the stock is currently rated as one of the top “buy” calls by most banking analysts.

In an exclusive interview with The Edge, Abdul Rahman speaks candidly about CIMB’s turnaround journey, the challenges ahead, and its ongoing acquisition of KAF Equities Sdn Bhd.

Additionally, analysts weigh in on whether CIMB will be able to reach its ROE target of 11.5% to 12.5% by the end of 2024, as set under its Forward23+ strategic plan. The group is now more than halfway through that plan.

Get the full story in this week’s issue of The Edge Malaysia.

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