Issuer Summary: CIMB

1. Credit View and Monitoring Focus

CIMB Group Holdings Berhad is a major bank holding company based in Malaysia. From a credit perspective, it should be viewed not merely as a domestic Malaysian bank, but as a full-service ASEAN banking group centered on Malaysia and extending into Indonesia, Singapore, Thailand, and other markets. As of May 7, 2026, the latest parent-level financial results that can be confirmed are the results for the fiscal year ended December 2025, announced on February 27, 2026, while the AGM-related release dated April 29, 2026 should be treated as supplementary material. As of that date, the company’s IR page does not show results for 1Q 2026, so the quantitative assessment in this report is based on the fiscal year ended December 2025.

In conclusion, CIMB is a banking group with investment-grade stability. Supporting factors include its business scale as a leading ASEAN bank, a deep deposit base centered on Malaysia, an improving non-performing loan ratio, adequate capital, and earnings sources across multiple markets. For FY2025, net profit was MYR7.9bn, ROE was 11.3%, the gross impaired loans ratio was 1.7%, and allowance coverage was 103.2%. The CET1 ratio was 14.9% and the total capital ratio was 18.6%, providing comfortable headroom even for a bank holding company. Earnings, asset quality, and capital are not deteriorating simultaneously.

At the same time, it would be somewhat complacent to view CIMB only as a highly defensive bank. NIM in FY2025 was 2.13%, down from 2.21% in 2024. In a falling-rate environment, loan yields tend to decline first, and it is difficult to absorb this solely through lower deposit costs. CIMB’s strong 2025 performance should be understood not as the result of margin expansion, but as having been supported by a combination of deposit mix, non-interest income, markets-related income, capital allocation, and low credit costs. Therefore, rather than treating 2025 profit as the normal run-rate for the future, it is closer to reality to characterize the year as one in which multiple supports absorbed NIM compression.

What is particularly important for bond investors is that the issuer is a holding company. The principal banking operations, deposits, loans, and liquidity reside in banking subsidiaries such as CIMB Bank Berhad and CIMB Islamic Bank Berhad. Debt at CIMB Group Holdings is structurally subordinated to depositors and certain creditors at the banking subsidiaries. This does not immediately mean the credit is weak, but the ratings and financial metrics of the banking subsidiaries should not be read directly as the safety of holding-company debt. Official ratings also distinguish between the holding company and the major banking subsidiaries.

As a fundamental credit assessment, CIMB can be positioned as “an investment-grade banking group supported by a leading ASEAN business franchise and good asset quality, although NIM compression, the holding-company structure, and increasing capital returns require continued monitoring.” Its strengths are clear, but those strengths are not high growth; they are the breadth of earnings sources, deposit stability, capital headroom, and asset quality. The key issues ahead are how far NIM declines in the 2026 results, whether the gross impaired loans ratio and credit costs remain low, whether CET1 headroom remains after capital returns, and how the market prices the risk differential between holding-company debt and bank subsidiary debt.

2. Business Snapshot: What is CIMB?

CIMB Group Holdings Berhad is not a standalone bank directly conducting banking operations, but a listed holding company that controls banking subsidiaries, Islamic banking, investment banking, asset management, and regional subsidiaries. According to company disclosures, CIMB was the fifth-largest banking group in ASEAN as of end-December 2025, with approximately 33,000 employees and more than 30 million customers. Its main businesses are Consumer Banking, Commercial Banking, Wholesale Banking, Islamic Banking, and Asset Management. The center of gravity for earnings is Malaysia, but Indonesia, Singapore, and Thailand are also important markets.

To understand the company, it is necessary to overlay two perspectives: “a Malaysian bank” and “a broad ASEAN banking group.” In Malaysia, it has deposits, retail banking, SME banking, and corporate banking as a major domestic bank. At the group level, however, it also owns operations in Indonesia through CIMB Niaga, as well as CIMB Singapore and CIMB Thai, and is not dependent solely on one market. This regional diversification supports credit quality, but it also creates complexity because each country’s economy, currency, regulations, and asset composition need to be assessed.

The foundation of earnings is deposit-taking and lending as a bank. At end-2025, gross loans were MYR452.9bn and customer deposits were MYR524.4bn, showing a clear core structure as a commercial bank. However, CIMB is not a bank that earns solely from loan-deposit spreads. Corporate banking, transaction banking, Treasury & Markets, investment banking, Islamic finance, and asset management overlap, and earnings are not excessively dependent on a single lending spread. This is an important defensive factor in a period of NIM compression.

Islamic finance is also indispensable to understanding CIMB’s business franchise. Malaysia is one of the central markets for Islamic finance, and CIMB also positions Islamic Banking as an important pillar of the group. This is not just one product line, but a mechanism for expanding customer touchpoints across deposits, financing, corporate banking, and capital markets products. From a credit perspective, Islamic finance does not by itself determine the credit quality of the entire bank, but it plays a role in deepening the domestic customer base and product competitiveness.

The shareholder structure also has some relevance. As of end-December 2025, the major shareholders were Khazanah Nasional with 21.4%, the Employees Provident Fund with 18.3%, and Kumpulan Wang Persaraan with 5.9%. CIMB is not a fully state-owned bank, but it is an issuer with deep relationships with Malaysian public funds and long-term institutional investors. However, this shareholder structure should not be interpreted as a government guarantee. The primary basis for credit quality remains the business franchise, asset quality, capital, and liquidity; the public-sector character is only a supplementary comfort factor.

3. What Changed Recently

The most significant recent change is that CIMB delivered record-level profit in the first year of its new medium-term strategy, which it calls Forward30. According to the results release dated February 27, 2026, net profit for FY2025 was MYR7.9bn, profit before tax was MYR10.7bn, EPS was 73.1 sen, and the full-year dividend was 47.1 sen. Total dividends amounted to MYR5.1bn, indicating sizable shareholder returns. The banking group’s earnings generation capacity is clearly confirmed.

However, reading these results simply as “very strong” would be somewhat crude from a credit perspective. NIM declined, and profit did not grow because of pure margin expansion. CIMB’s 2025 profit was supported by a combination of an improved deposit mix, non-interest income, markets-related income, recoveries and write-backs, low credit costs, and a review of capital allocation. This is not negative. Rather, the fact that multiple earnings sources worked in an environment of margin compression demonstrates the depth of CIMB’s business franchise. Still, investors need to distinguish which components are repeatable and which are closer to market conditions or one-off write-backs.

On the strategy side, Forward30, announced on March 5, 2025, is significant. CIMB’s pillars are disciplined capital allocation, deepening its deposit and payments base, providing multiple products to customers, and strengthening capabilities including digital and AI. Looking at 2025 results, the direction of increasing capital allocation to Malaysia and emphasizing the deposit base and non-interest income is also visible in the numbers. The results release also shows that Malaysia’s contribution to profit before tax rose from 57% to 61%, indicating that the center of gravity in capital allocation is shifting toward more profitable markets.

Capital policy is another important recent change. CIMB has announced a capital return program of up to MYR2.0bn, and combined with the 2025 dividend, its stance toward shareholder returns is quite clear. This indicates management’s confidence in capital headroom. Bond investors, however, need to view this from a slightly different angle. The fact that capital is ample enough to allow returns and the fact that sufficient loss-absorbing capacity remains after returns are not the same thing. The current CET1 ratio of 14.9% provides headroom, but if NIM compression and rising credit costs overlap in the future, the pace of capital returns will become a credit monitoring item.

Another change is CIMB’s sustainable finance initiative. In July 2025, CIMB raised its sustainable finance target through 2030 to MYR300bn. This is not an issue that directly affects near-term ratings or capital ratios, but it matters for capturing corporate customers’ energy transition, infrastructure investment, and sustainable financing needs. For a bank, sustainable finance is not merely a label; it can also become a business foundation for deepening long-term corporate relationships. In CIMB’s case, it is presented together with Forward30, so it should be viewed in the context of strengthening the corporate customer base.

As of May 7, 2026, 1Q 2026 results could not be confirmed on the company’s IR page. Therefore, the AGM release dated April 29, 2026 should be treated as a review of FY2025 and a shareholder-facing explanation, not as material showing a new performance trend for 2026. The next items to confirm are whether NIM, CASA, the gross impaired loans ratio, credit costs, and CET1 remain in the favorable condition seen in 2025 in the 2026 quarterly results.

In bond-investor terms, this update can be summarized as follows: CIMB has moved one step beyond being “a bank that delivered good results” and has become “a bank for which investors need to test whether it can defend earnings without relying on margins.” As of 2025, it provided a fairly good answer to that test. However, among the factors offsetting NIM compression, markets-related income and recoveries/write-backs may not recur in the same way every year. Therefore, from 2026 onward, the focus should be on how repeatable the improvement in deposit mix, fee income, cost control, and low credit costs proves to be. If these can be confirmed, CIMB’s credit quality will be easier to evaluate as a more structural earnings capability rather than a single year of strong results.

4. Industry Position and Franchise Strength

CIMB has a strong industry position. Company disclosures identify it as the fifth-largest banking group in ASEAN, and it is counted among the region’s major banks in terms of total assets, customer base, and regional footprint. In Malaysia, it has brand recognition and a deposit base as a major bank, while regionally it also operates in Indonesia, Singapore, and Thailand. This scale and regional footprint support credit quality not merely because the group is large, but because it can offer deposits, corporate banking, payments, and capital markets products broadly.

Relative to peers, CIMB is neither a bank specialized in retail deposits nor a financial institution skewed toward investment banking and markets businesses. It is a balanced banking group combining retail, commercial banking, corporate and markets businesses, and Islamic finance. This business composition has the advantage that a downturn in a single segment is less likely to destabilize the whole group. On the other hand, because markets-related income and recovery gains are included in earnings, quarterly results can be more volatile than those of a pure deposit-and-lending bank. CIMB’s strength, therefore, is not that it is an “extremely stable, simple bank,” but that it is a “major banking group with multiple earnings sources.”

The deposit base is central to credit quality. At end-2025, customer deposits were MYR524.4bn, the CASA ratio was 42.7%, and the loan-to-deposit ratio was 86.4%. Loans are adequately supported by deposits, and the structure is not dependent solely on wholesale market funding. Bank credit quality is shaped not only by the level of profit, but also by whether funding is retained under stress. On this point, CIMB was in a relatively strong position at least as of end-2025.

Regional diversification is also a strength. Indonesia through CIMB Niaga, CIMB Singapore, and CIMB Thai provide earnings sources not dependent solely on Malaysia. In the 2025 annual report, CIMB Singapore reported higher profit, CIMB Niaga remained resilient, and CIMB Thai recorded lower profit. This shows that regional diversification does not always work in a positive direction across all markets. The meaning of diversification is not that every market grows simultaneously, but that the group has room to absorb weakness in some markets at the consolidated level.

At the same time, CIMB’s franchise differs somewhat from that of the top Singapore banks, which have exceptionally strong foreign-currency liquidity, affluent-customer deposits, and global funding franchises. CIMB is more exposed to the economies, currencies, interest rates, and policy environments of Malaysia and Indonesia. This can be a factor that sets the ceiling for ratings and spreads. Therefore, while CIMB’s industry position is strong, it should not be viewed as a substitute for ultra-high-rated banks, but rather as an issuer that combines the diversification of a major ASEAN bank with the cyclicality of an emerging-market bank.

Putting this relative position in more practical terms, CIMB is not “the safest Asian bank credit,” but it is easier to view as “an ASEAN bank credit with a balanced mix of scale, earnings power, and capital.” It is difficult to expect the same rating ceiling or market liquidity as the top Singapore banks, while it has greater business diversification and capital markets access than smaller domestic banks. Therefore, in investment decisions, it is natural to position CIMB not as an absolutely defensive name, but as a core candidate when taking Malaysia and ASEAN bank risk.

CIMB’s strength is also not merely that it is large. Even large banks are vulnerable in an economic downturn if their deposits are weak, they depend on wholesale funding, and their capital is thin. In CIMB’s case, total asset scale, deposits, capital, and regional diversification are relatively aligned. This is quite important in credit analysis. Scale translates directly into funding capacity, capital reinforces that funding capacity, and regional diversification mitigates deterioration in a single market. The fact that these multiple factors work at the same time is what makes CIMB more than simply a major Malaysian bank.

5. Segment Assessment

Consumer Banking is a foundational segment responsible for relationships with individual customers, deposits, mortgages, cards, and everyday transactions. In the 2025 annual report, regional Consumer Banking reported profit before tax of MYR2.8bn, a slight decline from the previous year. Lower NIM and reduced write-backs in some areas had an impact, indicating that the retail segment is also affected by the interest-rate environment. However, the importance of this segment lies less in short-term profit growth than in the deposit base and customer touchpoints. The deeper the accounts, payments, and deposits of individual customers, the more stable the bank’s overall funding becomes.

Commercial Banking is the segment that supports relationships with SMEs and mid-sized companies. Profit before tax in 2025 was MYR1.8bn, down from the previous year. This reflected the impact of expenses and provisions. However, the commercial banking segment is important for more than just its profit amount. Relationships with SMEs tend to link lending, deposits, payroll accounts, payments, trade finance, and working-capital management, deepening the bank’s customer franchise. It is also a segment where credit risk can emerge more easily during an economic downturn, so it carries both strength and risk.

Wholesale Banking delivered strong profit growth in 2025. According to the annual report, profit before tax was MYR4.5bn, up 17.2% from the previous year. Trading income from Treasury & Markets and recoveries/write-backs in Malaysia and Indonesia contributed. This was a strong factor lifting groupwide profit. On the other hand, Wholesale Banking is more sensitive to market conditions, interest rates, foreign exchange, corporate transactions, and investor demand. Therefore, the strong 2025 numbers should not be treated directly as normal-period earnings power; rather, the segment should be viewed as one that can contribute significantly in good years but is more volatile in weak years.

By geography, CIMB’s diversification is not monolithic. CIMB Niaga is an important subsidiary in the Indonesian market, and its 2025 profit before tax was IDR8,826bn, a slight increase. CIMB Singapore recorded higher profit and supports regional corporate, affluent-customer, and funding transactions. CIMB Thai, by contrast, reported lower profit, showing the challenges in the Thai economy and banking sector. This indicates that regional diversification does not mechanically mean stability. Investors need to review not only the Malaysian parent business, but also earnings and asset quality in Indonesia, Singapore, and Thailand.

Islamic Banking and Asset Management are not the core drivers of group credit quality, but they have complementary significance. Islamic finance broadens the range of products offered to retail and corporate customers in Malaysia. Asset management generates fee income outside interest income. Neither segment alone is large enough to determine the credit quality of the issuer as a whole, but both are useful in building an earnings base that is not dependent only on deposit-and-lending operations. When evaluating CIMB’s earnings structure, the main focus should remain on loan-deposit margins, while also assessing how far these complementary earnings sources can mitigate NIM compression.

Overall, CIMB’s business segments have a structure in which Consumer and Commercial support deposits and the customer franchise, Wholesale acts as an earnings booster, and regional subsidiaries and Islamic Banking add diversification and product breadth. This combination is credit-positive compared with a bank dependent on a single segment. However, profit can look somewhat better in years when Wholesale is strong, while deterioration in Commercial can appear with a lag during an economic downturn. Therefore, in assessing CIMB’s segments, it is necessary to look not only at profit amounts, but also to distinguish which segments generate stable earnings and which are more sensitive to market conditions.

Another point to watch is the linkage among segments. Consumer Banking provides deposits and retail touchpoints, Commercial Banking captures SME payments and working capital, and Wholesale Banking handles large corporates and market transactions. If these businesses merely operate separately, they are no more than a collection of activities. However, as CIMB states in Forward30 through its emphasis on cross-sell, if it can provide deposits, payments, lending, capital markets, and Islamic finance across customer relationships, those relationships become deeper. From a credit perspective, this depth of customer relationships supports deposit retention and resilient fee income when the economy is weak.

Conversely, if the linkages among segments are weak, CIMB’s earnings become more exposed to the economic cycle than they appear. Even if Wholesale profit is strong, if it depends on temporary market conditions rather than recurring customer transactions, its credit value should be assessed conservatively. Even if Commercial lending grows, if it is merely lending competition without accompanying deposits or payment transactions, earnings commensurate with the risk are harder to retain. Therefore, future analysis should examine not only segment profit, but also how deposits, fees, and transaction depth move together.

6. Financial Profile

CIMB’s financial profile has clearly improved over the past several years. From 2021 to 2025, net profit increased from MYR4.3bn to MYR7.9bn, and ROE rose from 7.5% to 11.3%. Gross loans expanded from MYR378.0bn to MYR452.9bn, and customer deposits increased from MYR440.4bn to MYR524.4bn. Meanwhile, the gross impaired loans ratio declined from 3.5% to 1.7%. The simultaneous improvement in earnings, deposits, loans, and asset quality is a major credit support.

Looking at 2025 alone, the content is generally favorable. Net profit was MYR7.9bn, profit before tax was MYR10.7bn, ROE was 11.3%, and ROA was 1.02%. Total assets were MYR778.7bn, customer deposits were MYR524.4bn, and gross loans were MYR452.9bn. The gross impaired loans ratio was 1.7%, allowance coverage was 103.2%, and loan loss charge was 30bps, indicating good asset quality. CET1 was 14.9%, Tier 1 was 15.5%, and the total capital ratio was 18.6%, leaving ample capital headroom.

However, there are also points to note in profitability. NIM declined from 2.22% in 2023 to 2.21% in 2024 and 2.13% in 2025. The cost-to-income ratio also edged up to 47.3% in 2025. In other words, while the bank is profitable, not everything is improving if one looks only at margins and cost efficiency. In the 2025 credit assessment, the absolute level of profit and asset quality are strong, but it is necessary to examine carefully how CIMB is offsetting NIM compression.

The table below summarizes key metrics for the past three years. As of May 7, 2026, 1Q 2026 results cannot be confirmed, so the latest column is the fiscal year ended December 2025.

The first point from the table is the improvement in asset quality. The gross impaired loans ratio declined from 2.7% in 2023 to 1.7% in 2025, while allowance coverage has remained above 100%. This suggests that past problem-loan resolution and improvements in credit management have progressed to some extent. In bank credit, even strong profits are difficult to value more positively if asset quality is deteriorating, but CIMB was not in that combination at least as of end-2025.

The second point is the balance between deposits and loans. The loan-to-deposit ratio has fallen to 86.4%, and the bank is not forcing loan growth at a pace above deposit growth. Customer deposits increased year on year, and the CASA ratio was also relatively high at 42.7%. This supports funding resilience even in a NIM compression environment. A bank with stable deposits is less likely to suddenly become dependent on high-cost wholesale market funding even when earnings come under pressure.

The third point is capital strength. CET1 has declined gradually from 15.3% in 2023 to 15.2% in 2024 and 14.9% in 2025, but remains sufficiently high. The total capital ratio is also 18.6%. Even with capital returns, capital shortage is not immediately the main issue at the current level. However, if earnings slow, credit costs rise, and capital returns continue, it will be necessary to confirm how much of this headroom remains.

Overall, CIMB can be assessed not as “a bank that earns through very high margins,” but as “a bank that is absorbing NIM compression through its deposit base, non-interest income, asset quality, and capital headroom.” This is quite important for senior bond investors. Rather than focusing on short-term profit growth rates, investors should continue to monitor whether the gross impaired loans ratio, allowance coverage, loan-to-deposit ratio, and CET1 are being defended simultaneously.

What should be avoided when reading the financial metrics is isolating the 2025 ROE of 11.3% and concluding that profitability has sufficiently improved. A bank’s ROE moves with margins, credit costs, expenses, capital allocation, write-backs, and tax burden. In CIMB’s case, 2025 ROE is good, but NIM is falling. In other words, while the improvement in ROE is a strength, misjudging its future sustainability is easy unless the components are decomposed. In credit analysis, what matters more than the ROE level itself is whether the earnings supporting ROE are stable, whether they were created by eroding capital, and whether they are based on an assumption of credit costs that is too low.

Another important point is the impact of capital-ratio headroom on management behavior. A bank with a sufficiently high CET1 ratio can more easily avoid forced loan growth or a tilt toward high-risk transactions even if profit slows in the short term. CIMB had this headroom as of end-2025. Therefore, the capital ratio is not merely a regulatory number; it is also a figure showing the room management has to choose a defensive stance. If CET1 begins to decline materially in the future due to capital returns or credit costs, this room for action would narrow, and the credit view would become more cautious.

7. Structural Considerations for Bondholders

From a bond investor’s perspective, the most important point is that CIMB Group Holdings Berhad is a holding company. A holding company depends on dividends and capital movements from banking subsidiaries. Banking subsidiaries have depositors, regulators, and local creditors, and in stress periods, funds transfers to the holding company may be restricted. Therefore, the strength of the group as a whole and the recovery ranking of holding-company debt are not the same thing.

This distinction is also reflected in official ratings. CIMB Group Holdings Berhad is rated Moody's Baa1 / Stable, RAM AA1 / Stable, and MARC AA+ / Stable. By contrast, the major banking subsidiary CIMB Bank Berhad is rated Moody's A3 / Stable, S&P A- / Stable, RAM AAA / Stable, and MARC AAA / Stable, which are higher than the holding-company ratings. This is because the banking subsidiary’s deposit base and legal priority are viewed as stronger than those of the holding company.

The hierarchy of capital instruments is also important. CIMB issues AT1 and Tier 2 instruments at both the holding company and banking subsidiary levels. Because these instruments function as regulatory capital, they carry higher loss-absorption risk than senior debt. For senior bond investors, subordinated capital can act as a buffer. By contrast, investors in AT1 and Tier 2 need to review discretionary coupon payment, call deferral, principal write-down, non-viability clauses, and other terms individually.

Therefore, at least three points should be separated when assessing CIMB bonds. First, the credit quality of the overall group. Second, the difference between the holding company and the banking subsidiaries. Third, the difference among senior, Tier 2, and AT1 instruments. CIMB is a high-quality issuer, but risk varies significantly depending on which entity and which layer of security is purchased.

This structural issue tends to be less visible in normal times. If the group as a whole is profitable, capital is strong, and ratings are Stable, investors may be inclined to treat all instruments simply as “CIMB bonds.” However, what is truly important in financial institution bonds is where losses are absorbed under stress, where cash is held, and which creditors are protected first. In CIMB’s case, deposits and the main businesses are on the banking subsidiary side, while the holding company depends on dividends and capital movements from those subsidiaries. Therefore, the group’s normal-period credit quality and creditor ranking under stress should be considered separately.

For AT1 and Tier 2 in particular, price volatility and call decisions are likely to be larger than for senior bonds even if the issuer as a whole is sound. Because capital instruments are treated as regulatory capital, investors are accepting a loss-absorption structure, not just receiving a higher yield. This point is no different for a major banking group such as CIMB. Therefore, for senior debt, the focus can mainly be on issuer credit quality and funding capacity, while for AT1 and Tier 2, it is necessary to check issuance terms, call dates, regulatory treatment, and rating notching.

8. Capital Structure, Liquidity and Funding

CIMB’s funding structure is fundamentally deposit-led. At end-2025, customer deposits were MYR524.4bn, gross loans were MYR452.9bn, and the loan-to-deposit ratio was 86.4%. This indicates that lending is adequately supported by deposits. Compared with financial institutions that rely excessively on wholesale market funding, CIMB has higher funding stability.

For liquidity, the public materials reviewed for this report did not confirm sufficiently specific LCR or NSFR figures to include in the main table. However, the 2025 annual report explains that the group manages liquidity based on BNM’s LCR and NSFR regulations and operates above regulatory levels in the ordinary course of business. At this stage, liquidity is not a main credit concern.

CIMB also makes some use of wholesale market funding. The annual report shows bonds, sukuk and debentures of MYR17.1bn, other borrowings of MYR13.2bn, and subordinated obligations of MYR12.3bn. While deposits are the core funding source, CIMB also maintains capital markets funding channels. This is positive in the sense that it can flexibly raise regulatory capital and medium- to long-term funding.

The Capital and Debt Instruments page also confirms that the holding company issued Tier 2 and AT1 instruments in August and December 2025. This indicates that market access is functioning. In bank credit, what matters is not only whether an issuer can issue capital instruments in normal times, but also whether it can refinance and manage calls when market conditions deteriorate. CIMB has maintained that market access at least for now.

The significance of capital and liquidity is not limited to sound ratios. A bank with strong capital and stable deposits is better able to avoid forced loan growth or a shift toward high-yielding transactions when earnings come under pressure. In CIMB’s case, the combination of CET1 at 14.9%, a loan-to-deposit ratio of 86.4%, and CASA at 42.7% indicates that management does not need to rush into taking risk. This room for action is an important source of credit defense.

In assessing liquidity, it is necessary to look not only at the volume of deposits, but also at their nature. A higher CASA ratio generally indicates a larger share of low-cost and sticky funding. Of course, CASA cannot be considered completely stable as digitalization and rate competition progress, but the 42.7% level at end-2025 shows that CIMB has a certain base of low-cost deposits. In a NIM compression environment, the decline in asset yields cannot be stopped immediately, so the ability to contain liability costs becomes important. In that sense, maintaining CASA is a central monitoring item going forward.

The presence of wholesale market funding also has two sides for a deposit-led bank. In normal times, the ability to issue MTNs, sukuk, Tier 2, and AT1 instruments indicates a broad investor base and flexibility in capital management. On the other hand, when markets deteriorate, refinancing costs and call decisions for these securities can affect investor sentiment. In CIMB’s case, wholesale funding is not a main weakness because the deposit base is deep, but outstanding capital instruments and market access are issues that should be checked not only by subordinated investors, but also by senior investors.

9. Rating Agency View

Based on the official ratings confirmed as of May 7, 2026, the holding company CIMB Group Holdings Berhad is rated Moody's Baa1 / Stable, RAM AA1 / Stable, and MARC AA+ / Stable. The major banking subsidiary CIMB Bank Berhad is rated Moody's A3 / Stable, S&P A- / Stable, RAM AAA / Stable, and MARC AAA / Stable, higher than the holding company. PT Bank CIMB Niaga is rated Moody's Baa1 / Stable and Fitch BBB- / Stable, while CIMB Thai is rated Moody's Baa1 / Stable and Fitch National Rating AA(tha) / Stable.

This rating configuration shows that the rating agencies assess CIMB as an investment-grade major banking group, while clearly distinguishing between the holding company and banking subsidiaries. The holding-company rating is lower than the banking subsidiary rating because it reflects structural subordination and constraints on fund transfers from subsidiaries. This is consistent with the credit assessment in this report. CIMB’s group credit is strong, but holding-company debt should not be placed on the same footing as banking subsidiary debt.

The Stable rating outlooks indicate that CIMB’s strong 2025 performance, capital headroom, and improved asset quality are being recognized to some extent. However, investors should not take comfort from the word Stable alone; they need to confirm what supports that stability. The supports are the deposit base, CET1, the low gross impaired loans ratio, allowance coverage, and broad business franchise. Conversely, if these deteriorate simultaneously, the rating tone could change.

The key rating issues going forward are how far NIM compression erodes earnings power, whether CET1 remains sufficient after capital returns, whether credit costs stay low, and whether asset quality at regional subsidiaries avoids deterioration. At present, the ratings do not appear to be under immediate downward pressure, but whether the favorable 2025 numbers are maintained in 2026 needs to be confirmed in the next results.

When linking ratings to investment decisions, investors should also pay attention to the time horizon used by rating agencies. Ratings usually do not move significantly on a single quarter of NIM compression or earnings volatility. Instead, they assess whether the combination of earnings power, capital, asset quality, and funding changes over several quarters to multiple years. Therefore, CIMB’s Stable ratings are an important comfort factor, but they do not fully suppress short-term spread movements or price volatility in capital instruments. Bond investors need to distinguish between rating stability and market-price volatility.

Nor should rating support factors be confused with standalone credit strength. CIMB has shareholders with a public-sector character, such as Khazanah, but this is not an explicit guarantee. The core of the ratings is the banking group’s business franchise, capital, and asset quality. The relationship with the government may provide supplementary comfort, but it is not a reason to treat CIMB bonds as sovereign-equivalent credit.

10. Credit Positioning

Within Asian financial credit, CIMB sits between the ultra-high-rated major Singapore banks and the more domestically dependent Malaysian and Indonesian banks. Its franchise is large, capital and asset quality are sound, and it offers comfort as an investment-grade issuer. At the same time, it is more exposed to the economies, currencies, and interest-rate environments of Malaysia and Indonesia, and is not a completely low-volatility bank.

Viewed as holding-company debt, CIMB can be positioned as “a high-quality banking group bond, albeit structurally one layer heavier than operating-bank debt.” For senior holding-company debt, the deposit base, earnings, dividend capacity, and capital headroom of the banking subsidiaries provide indirect support. Compared with senior operating-bank debt, however, a risk premium is needed for structural subordination.

Detailed relative value in spreads has not been confirmed in this report, but from a fundamental perspective, CIMB is closer to a name for taking stable investment-grade risk in a major ASEAN bank than a credit for pursuing large upside. Its investment appeal lies less in high growth expectations than in the combination of deposits, capital, asset quality, and regional diversification.

Within its peer group, CIMB is not purely defensive, but nor is it an excessively aggressive bank. Through Forward30, it is strengthening capital allocation and the customer franchise, and management is clearly focused on improving profitability. For credit investors, however, what matters is not the increase in ROE itself, but whether capital headroom or credit discipline is being sacrificed in the process of raising ROE. As of end-2025, this balance was broadly maintained.

11. Key Credit Strengths and Constraints

CIMB’s main strengths are, first, its business scale as a leading ASEAN bank; second, its deep deposit base centered on Malaysia; third, regional diversification including Indonesia, Singapore, and Thailand; fourth, asset quality shown by a gross impaired loans ratio of 1.7% and allowance coverage of 103.2%; and fifth, capital headroom, with CET1 at 14.9% and the total capital ratio at 18.6%. These factors support credit quality over a longer horizon than single-year profit.

From a business perspective, the combination of Consumer, Commercial, Wholesale, Islamic Banking, and Asset Management is also a significant strength. Even when NIM declines, non-interest income, corporate banking, markets-related income, Islamic finance, and asset management provide some offset. CIMB’s 2025 earnings were supported by this multifaceted earnings base, and the group has broader earnings support than a simple deposit-and-lending bank.

The constraints, by contrast, are first, NIM compression; second, the inclusion of markets-related income and recoveries/write-backs in 2025 profit; third, structural subordination of holding-company debt; fourth, potential buffer erosion if capital returns increase; and fifth, weakness in some geographies such as Thailand. In particular, it may be somewhat too optimistic to treat the strong 2025 performance directly as the normal level of future earnings.

CIMB’s credit quality is not simply a matter of being safe because it is a large bank. It is supported by a strong business franchise, deposits, capital, and asset quality, while NIM compression and the holding-company structure set the ceiling for the assessment. Therefore, CIMB is a stable investment-grade banking group, but investment decisions require careful confirmation of which layer of security is being purchased, which entity is the issuer, and whether asset quality is maintained from 2026 onward.

12. Downside Scenarios and Monitoring Triggers

The most realistic downside scenario is one in which NIM continues to decline, credit costs also rise, and the 2025 profit level can no longer be maintained. In 2025, CIMB was able to absorb margin compression through non-interest income and low credit costs. However, if falling rates, intensifying competition, and sticky deposit costs continue, and the gross impaired loans ratio or loan loss charge rises at the same time, profit and internal capital generation would come under pressure. In that case, profitability would likely deteriorate first, followed by a higher provisioning burden, and finally pressure on capital return capacity and rating tone.

The second downside is stress from regional subsidiaries. Indonesia, Singapore, and Thailand provide diversification benefits, but each is affected by local economic conditions, currencies, regulation, and credit conditions. If further deterioration emerges in a market that already showed weakness in 2025, such as Thailand, the group may still be able to absorb it, but investor perception would be affected. Looking at CIMB only through the Malaysian parent business would miss this risk.

The third downside is a breakdown in the balance between capital returns and growth investment. The capital return program of up to MYR2.0bn is evidence of current capital headroom. From a bond investor’s perspective, however, it also means surplus capital is being distributed outside the group. If NIM compression, rising credit costs, and deterioration at regional subsidiaries occur simultaneously, continued capital returns would erode credit buffers.

The fourth downside is a phase in which the market focuses more heavily on the structural subordination of holding-company debt. In normal times, investors tend to focus on the credit quality of the group as a whole. However, when financial markets become unstable, differences among operating-bank senior debt, holding-company senior debt, Tier 2, and AT1 are more strongly reflected in pricing. Even if CIMB’s group credit does not deteriorate materially, spreads on holding-company debt and capital instruments may widen first.

Monitoring items going forward are NIM, CASA ratio, loan-to-deposit ratio, gross impaired loans ratio, allowance coverage, loan loss charge, CET1, the pace of capital returns, Wholesale Banking profit, and the earnings and asset quality of CIMB Niaga, CIMB Singapore, and CIMB Thai in the 2026 results. In particular, when 1Q 2026 or first-half disclosures are released, investors should confirm whether the strength seen in 2025 is continuing, or whether NIM compression and normalization of credit costs are beginning to appear first.

13. Short Summary & Conclusion

CIMB is a major bank holding company that conducts commercial banking, Islamic banking, wholesale banking, wealth, and investment banking operations across multiple ASEAN markets, centered on Malaysia. It is an investment-grade banking group supported by a leading ASEAN business scale, deposit franchise, improved asset quality, adequate capital, and regional diversification. At the same time, NIM compression, the holding-company structure, capital returns, and asset quality at regional subsidiaries require continued monitoring. The direction is stable. Investors should distinguish between CIMB Group Holdings debt and banking subsidiary debt, and should monitor NIM, CASA, credit costs, CET1, capital returns, Wholesale earnings, and asset quality at CIMB Niaga, Singapore, and Thai.

14. Sources

Key sources confirmed:

• CIMB Financial Statements 2025, accessed May 7, 2026
• CIMB FY2025 results press release, February 27, 2026
• CIMB AGM release, April 29, 2026
• CIMB Credit Ratings page, accessed May 7, 2026
• CIMB Capital and Debt Instruments page, accessed May 7, 2026
• CIMB Shareholding Information page, accessed May 7, 2026
• CIMB About Us / Who We Are pages, accessed May 7, 2026
• CIMB Forward30 strategy release, March 5, 2025
• CIMB sustainable finance target release, July 14, 2025

Items unconfirmed or requiring additional confirmation:

• As of May 7, 2026, the main 1Q 2026 results were not confirmed on the IR page
• Individual bond terms, non-viability clauses, and write-down clauses for the holding company and major banking subsidiaries
• Latest quarterly comparison of capital, asset quality, and liquidity by major subsidiary
• Live peer spread comparisons, secondary liquidity, and investor base