This article first appeared in The Edge Malaysia Weekly on March 10, 2025 - March 16, 2025

CIMB Group Holdings Bhd’s (KL:CIMB) chief Novan Amirudin is looking forward to tackling the ups and downs that come with the bank’s ambition of growing at a faster pace over the next six years. 

He is someone who relishes a good challenge.

“To me, I always enjoy it when I’m learning and growing — and, yes, I’m definitely learning and growing,” says Novan, who came on board as group CEO of the country’s second-largest banking group by assets last July.

Speaking to The Edge in his first interview since taking the helm, Novan, 45 this year, comes across as someone who is enthusiastic and driven.

It is late afternoon on the first working day of Ramadan and Novan, who is fasting, shows no sign of wear as he talks to The Edge for two hours, mainly about the group’s new six-year strategy, Forward30 (F30).

The last eight months or so have been a steep learning curve for Novan, who comes from a largely investment banking and corporate finance background. CIMB’s key businesses are mainly consumer, commercial and wholesale banking (under which investment banking falls).

A chartered accountant, he had spent almost 16 years with JPMorgan, his last position being head of equity capital markets for Southeast Asia and head of investment banking for Malaysia. In July 2022, he joined CIMB as co-CEO of group wholesale banking.

Two years later, in a move that surprised some, he was picked to head CIMB.

“I’m generally the type of person who takes it as it comes,” he says, when asked about his initial reaction to being chosen for the role. “I guess it was mixed feelings — surprised, but also honoured and privileged at being given the opportunity to serve this exceptional organisation. And I will return that trust by giving 120% [of my effort].”

Industry observers point out that Novan will not be the first leader at CIMB to have had to learn quickly on the job.

His immediate predecessor, Datuk Abdul Rahman Ahmad — who returned to Permodalan Nasional Bhd last year as its president and group chief executive — did not have a banking background when he took the helm at CIMB in 2020. And, Tan Sri Nazir Razak, who was group CEO from 1999 to 2014 and later its chairman until end-2018, also came from an investment banking background. Both leaders were instrumental in taking CIMB to new heights over the years.

Now, all eyes will be on Novan to see whether he can do the same. Under F30, CIMB aims to achieve top-quartile return on equity (ROE) among regional peers by the financial year ending Dec 31, 2030 (FY2030). The shorter-term target is to achieve an ROE of 12% to 13% by FY2027, from 11.2% in FY2024.

Describing himself as “a family person”, Novan enjoys playing golf with his wife and two teenage boys over the weekends. “Golf is like family time for us,” he says.

Below are excerpts from the interview.

The Edge: You’ve been an investment/wholesale banking guy all this while. Has it been difficult making the transition into consumer and other parts of banking? Are you getting the support from all the divisions?

Novan Amirudin: I’m learning every day. It’s been a very humbling journey and I’m very fortunate to have strong and supportive stakeholders. When I was running wholesale and investment banking, it was about running the business operations. Now, it’s a different type of role — it involves capital allocation, stakeholder management across the entire group, and operations.

Are you liking it?

Yes, I think it’s fun. To me, I always enjoy it when I’m learning and growing — and yes, I’m definitely learning and growing.

Does CIMB have an appetite for inorganic growth under the F30 strategy?

Yes, we’re always open to it. There was a point in time when we did a lot of M&A (mergers and acquisitions). Then, we tried to integrate the businesses. We feel now we’ve come to the point where we’ve already integrated [those businesses] and we’ve earned the right to do M&A play again. And M&A doesn’t need to be one large big M&A. It can be smaller bite-sized opportunities.

For example, when our Chinese partner [CGS] exercised the option to buy us out from our stockbroking partnership, we then went on to buy KAF Securities, and now operate CIMB Securities. In Indonesia last year, we were looking at Commonwealth Bank, but we lost out to OCBC. So, we are always looking at opportunities.

There’s an expectation that there could be attempts at bank M&A in Malaysia this year. Would CIMB actively undertake bank M&A, or is it something you’d consider only if a proposal came to your table?

There must be a value proposition for an M&A to happen. And, it must be a win-win for all the parties involved. From my perspective, until you have those two tenets, there’s nothing much to comment on any M&A.

We know that we have a 2030 plan. We know that we want to grow to a certain size. It can be done organically and it can be done inorganically. We are open to M&A, but whatever it is, it must be the best deal. And it must be in the areas that make sense for us to reallocate our capital.

In Indonesia, in particular, is there merit for expansion?

Yes, I mean, it’s a large population. It’s still [among] the highest ROE (return on equity) market for us. And if you want to aspire to become best-in-class ROE, clearly it’s an important market.

How might NIMs (net interest margins) pan out in 2025 as a group and in Indonesia in particular?

It will all depend on how interest rates move within the countries. You saw rate cuts in Indonesia and Thailand this year. When rates are cut, asset prices come down, and we then need to reduce cost of funds to protect NIM. But if liquidity is tight and competition is intense, such as what’s being observed in Indonesia, you cannot cut deposit rates, so then NIMs come under pressure.

So group NIM won’t stabilise this year?

No, I think NIM will come down because Indonesia makes up 25% of our business. But we can offset some of the pressure this year through healthier loan growth. We do see that the current geopolitical uncertainties will create more opportunities within Asean, and we do see a lot more opportunity for loan growth. That increase in loan growth will offset the decline in NIM. We expect stronger loan growth of 5% to 7% this year, from 4.8% last year.

What can you guide on dividends going forward? Is there a need to be conservative given the latest Basel III requirements?

No, we are okay. We’ve guided the market that we’re maintaining our 55% payout ratio.

For two years in a row now, you’ve paid special dividends. Is that something that can be continued?

If there is excess capital, yes. To me, if we don’t reinvest the capital to earn better returns, we’re better off returning the capital to shareholders, and that’s what we did over the last two years. So if there’s excess capital and there’s no better way to deploy it, then we will return it to shareholders.

Are there any areas of concern for you when it comes to the bank’s asset quality? Your gross impaired loan (GIL) ratio used to be the highest but it’s improved strongly.

No, we are in a good place. One of the things we did over the last five years was drive an awareness into safeguarding the bank. And that really helped, and translated into an improvement in asset quality. So, you not only see that GIL went down, we are also seeing ECL (expected credit loss) coming down, and loan loss coverage (LLC) coming up. We’re at 105% LLC. I think we are in a very good place right now with regards to asset quality.

How much have you slated for technology investments in the F30 strategic plan? Is it more than in the previous plan?

We think of technology investments as a percentage of our income. We roughly budget every year for about 7% to 9% of our income to go towards technology investments. And we’ve been doing that quite consistently. So we’re going to maintain that ratio. 

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