CIMB Bank PH eyes ‘significant’ income growth

CIMB Bank PH eyes ‘significant’ income growth

CIMB BANK Philippines, Inc. (CIMB Bank PH) turned a profit last year as strong customer growth drove increases in loans and deposits, its top official said on Thursday.

The digital-only commercial bank also expects to log “significant,” above single-digit net income growth this year, CIMB Bank PH Chief Executive Officer Vijay Manoharan said at a briefing on Thursday.

“Five years into our business, we are amongst the very few digital banks globally that can confidently say that we are a profitable venture. We are no longer in the red. That is a significant milestone on top of still investing in the business,” Mr. Manoharan said, but did not give a specific 2023 profit figure.

“Significantly stronger would mean not single digits. We expect it to be much healthier than last year,” he added when asked by how much he expects the bank’s net profit to grow this year.

The bank is aiming to disburse P75 billion in loans this year, he added, which would mark a 23% growth from the end-2023 level. It has disbursed about P25-30 billion as of end-May, Mr. Manoharan said.

On the funding side, the bank is also aiming for a total deposit cash in level of P500 billion, which would be up by 200% from the end-2023 level, he said, adding total deposit cash ins stood at P100 billion as of end-May.

The lender reached eight million customers at end-May with total active customer accounts at just above 11 million.

Of its total customers, deposit customers were at 6.5 million, while 3.5 million were loan customers as of May.

CIMB Bank PH aims to reach 8.5 million customers this year as it wants to grow its customers by a million annually.

Meanwhile, Mr. Manoharan said the bank’s funding income could be affected by potential rate cuts by the Philippine central bank later this year.

“The rate cuts will affect the deposit rates, but we’re not pegged to the overnight rates. What we follow is the market rates. If they cut it by 50 basis points (bps), we won’t cut ours by 50 bps. If the BSP (Bangko Sentral ng Pilipinas) cuts their rates, we take a bit of a hit for our funding income. But we don’t adjust like that because we are still aggressively competing,” he said.

He said he expects nonperforming loans to grow at a single-digit rate this year, noting that 95% of the bank’s borrowers are able to pay their loans on time, while the remaining 5% borrow in large amounts and are unable to repay their loans. 

CIMB Bank PH is looking to tap overseas Filipino workers and the micro, small, and medium enterprise sector within the year through its digital embedded financing strategy, Mr. Manoharan added, and is looking to offer digital loans, savings accounts, and payment products targeted for these markets.

“We plan to get into the fray within the year, at least start to dabble our toes and tease a little bit this year… We’ll start to do some pilots, some learning, launch something, and learn from it,” he said. — Aaron Michael C. Sy