Maybank Investment Bank Bhd (Maybank IB) has downgraded CIMB Group Holdings Bhd shares to ‘defensive’ and revised its target price to RM7.60 from RM9.00.
The downgrade reflects concerns over CIMB’s increasing exposure to regional economic uncertainties due to the opening of CIMB banks across the ASEAN region.
Maybank IB said CIMB’s expansion across Southeast Asian markets makes the bank more vulnerable to regional economic fluctuations, compared to its more domestically focused peers.
CIMB is also potentially subject to downside risks from a domestic slowdown, while its operations in Thailand, Indonesia and Singapore further increase its exposure to regional issues.
Maybank IB commented that Indonesia’s interest rate cut could squeeze margins in the near term, while the weakness of the Indonesian rupiah (IDR) could also impact CIMB Niaga’s earnings.
Maybank IB added that it has reduced its CIMB Group's net profit forecast for the financial year 2025 (FY25)/FY26 by 4.3 percent and 4.9 percent respectively.
In brief, Maybank expects Q1 2025 loan growth within the annual management target of 5-7 percent.
