Good afternoon, ladies and gentlemen, and welcome to CIMB Group's financial results briefing for fourth quarter of 2025. Our host is CIMB Group CEO Novan Amirudin and Group CFO Khairul Rifaie.

My name is Steven from the CIMB IR team. You should have received the analyst presentation and financial statements by now from the Investor Relations email.

Otherwise, you may find the documents in the IR section of our website at www.cimb.com. Before we begin, please be informed that this briefing is being recorded.

I would like to encourage everyone to include your name and company on the Teams app to allow us to identify you. Note that all participants' lines are currently on mute, and you have the opportunity to ask questions after the presentation by using the raise hand function.

At this juncture, I would like to hand over the briefing to Novan and Khairul. Novan, over to you.

Thank you very much, Steven. Thank you very much, all, for joining our presentation this afternoon.

It's been a very resilient year, despite all the challenges that we saw on the FX side given the ringgit appreciated vis-a-vis other ASEAN currencies, the persistent rate cuts that we saw in all markets that we operate, as well as the various macroeconomic headwinds. We completed 2025, which is the first year of our Forward30 execution, by delivering record net profit of RM7.9 billion and which translated to a 11.3% ROE.

I will now go into the drivers behind this record performance. First and foremost, if you focus on the table on the left-hand side, the NII has two components.

One is our NIMs, and secondly is our asset growth. The first point, NII was flat despite all the persistent rate cuts, and we attribute this to our successful CASA strategy, which focus on reducing our cost of funds, which then cushioned our NIM compression to 8 basis points year on year.

Now alongside that, assets then grew for us on a constant currency basis by 6.1%. These two factors basically assisted in our flat NIM despite the persistent rate cuts.

NOII saw a year of growth. Year on year, it grew 3.1%, but the main call out here is our client franchise business derived from NOII, which grew 4.8%, faster than the growth in NOII.

This is a testament to our successful cross-sell strategy, which focus on client franchise business as opposed to just trading income. Moving on to our operating expenses, thanks to our capability strategy, this led to disciplined cost control and our cost-to-income ratio at 47.3%.

As you can see, opex grew 2% year on year with a flat personnel cost, but we continued investments in technology. We invested RM1.7 billion in 2025, which is about 7.8% of our income, which is within the guidance of 8% to 9% that I provided earlier in the year.

With regards to asset quality, this is the best ever GIL that CIMB Group has achieved. Our GIL improved from 2.1% last year to 1.7%.

Our credit cost remained stable at about 30 basis points, and our coverage ratio remained above 100%, closing at 103.2%. All these contributed to our net profit growth on a constant currency basis of about 5.3%, we grew from RM7.7 billion to RM7.9 billion.

With regards to capital, we've optimized CET1 to 14.3%, and as a result of the record financial performance, we then decided to share our record performance with our shareholders also via a record dividend payout. We paid out 47.1 cents, and if you recall that last quarter we were the first Malaysian company to announce a RM2 billion capital return program, this 47.1 cents include the first tranche of that.

With all those drivers coming together, that gave us an ROE of 11.3%, which is 10 basis points higher than the 11.2% we achieved last year. If we look at 2025 in review, based on all the guidance that we provided to you at the start of the year, we have largely met all our guidance.

Cost-to-income ratio was very close. We guided less than 47%.

We achieved 47.3% from that 2% increase in opex. A recap of our Forward30 strategy, which is our six-year plan until 2030, this anchors on our purpose of advancing customers and society, and how are we executing Forward30 is what I like to call the 4Cs.

The first C is capital, and this is important for us to always look at how to reallocate capital to grow. The second C is CASA, about building a very strong deposits franchise business to optimize our cost of funds.

Our third C is cross-sell, and this is to increase returns and increase ROE. Our fourth C is capabilities, and capabilities is all about becoming simpler, better, faster every day.

Now how do we perform on each of the 4Cs throughout the year, which led to our strong financial performance? The first C on capital, if you look at the table on the top left-hand side, given the challenges that we saw in Indonesia and Thailand last year, we then reallocated more capital towards Malaysia, which was a lot more stable and saw a lot more tailwinds relative to the other ASEAN markets.

RWA allocation to Malaysia increased to 56%, and therefore profit before tax also increased to 61% with a stronger ROE of 12.1% for Malaysia. Correspondingly, you would see that the RWA allocation in Indonesia and Thailand reduced, which then also led to a reduction in the PBT contribution to the overall group.

Singapore remained a very strong market for us, 18% ROE in 2025, and we maintained our RWA allocation there with slightly higher contribution in profit before tax. I've always mentioned Thailand is a market that we are restructuring.

That work is ongoing. It's seeing a lot of progress, and we will be updating you about our Thailand progress in the not too distant future.

Now sharing our strong performance with our key stakeholders, as I mentioned earlier, this is the year where we paid the highest dividend amount of 47.1 cents, and you can see on the table on the bottom left-hand side how that has grown over time. We announced our RM2 billion capital return program until the end of 2027.

All permanent workforce in Malaysia are earning above the Malaysian living wage, and we committed earlier this year a RM200 million investment in the communities that we serve until 2030. This is 30% higher than our commitment in the previous cycle.

The second C on CASA, as a result of the focus on deposits and the focus on building a strong deposits franchise, we saw a reduction in our cost of funds by 21 basis points year on year, coming from a 5.4% increase in deposits on a constant currency basis, which improved our loan-to-deposit ratio. This helped cushion the persistent rate cuts that we saw in all markets, NIM compressed by about 8 basis points year on year.

What is encouraging is what we saw in the fourth quarter last year, which we are continuing to see in January this year, where the NIM compression is starting to bottom out, as you can see on the chart on the right-hand side. We always believe that to build a strong CASA franchise, it is a byproduct of having very good cash management services and offerings to our customers.

In the third quarter of 2025, we launched the OctoBiz app for non-retail businesses. This is the Octo equivalent, but for businesses.

With the launch of OctoBiz, all our front-end customer-facing applications, whether is it Touch 'n Go, Octo, or OctoBiz, are now all next generation ready. We also worked with the government and invested in the BUDI95 program towards the third quarter of last year.

We were involved from the front-end side via Touch 'n Go all the way to the back-end side, where we invested in the system that tracks the fuel subsidies that given to each Malaysian, and we also manage the cash management side from the government to the petrol companies. In December last year, we also announced our blockchain ambitions.

We have committed that our next CIMB bond offering will be in tokenized format. We've been admitted into the Bank Negara Digital Asset Innovation Hub with regards to blockchain.

Just a few days ago, we announced our partnership with one of our spin partners, Ant Financial, with regards to participating in their digital platform for cash management and treasury solutions. Our third C, cross-sell, this is something that you saw the growth in the client franchise outgrowing our growth in NOII last year.

We remain as the number one investment banking house, whether on the bond side as well as investment banking as a whole across Malaysia, Indonesia, Singapore, and Thailand with respect to deal volume, advice to our clients. Our fees and commission grew 3.2% year on year.

Our treasury client sales, which is the business that we generate from our customers on the treasury side, grew 7.2% year on year. Wealth grew 9.2% on the back of a 3% increase in our wealth customers.

Our fourth C, which is capabilities, there's a relentless focus in CIMB Group to become simpler, better, and faster. This is contributing to what you are seeing in the table at the bottom, where operating expenses have remained relatively flat with a 2% growth, coming from a flat personnel cost over income, but still continued investments in technology, which was within our guidance.

We are focusing on our getting simpler, better, faster by setting up the SBF Lab within CIMB Group. This is where we encourage all businesses and enablers to come up with processes to improve your processes further.

If something used to take 12 steps, why not six? If something that used to have six signatures, why not two?

Last year, we saw 30-over projects coming up from a bottom-up basis from the relevant businesses to our SBF Lab to make things simpler, better, and faster. We also invested RM100 million in upskilling our people when it comes to AI last year, and there's an increasing usage of AI throughout our organization, whether is it coming from transaction monitoring, whether is it coming from client onboarding, and more recently, into our front-end customers providing them with the tools and data to serve our customers better.

With that, I'll now hand it over to Khairul to go through his observations. Khairul, over to you.

Thank you, Novan, and and good afternoon, everyone. I'll go straight into the numbers with first slide 9.

We've gone through this, but I'll provide a bit more color on these numbers on slide 10. Firstly, if you look at our underlying performance that has been robust.

We had the seasonally weaker 4Q 2025, typically in the fourth quarter. As you can see, on a constant currency basis, if you compare this quarter to last year fourth quarter, on a constant currency basis, our total income grew by 3.8% with our net profit growing at 8.3%.

Similarly, the underlying robust performance was recorded on a year-on-year basis. If you look at total income, that grew by 4.2% with net profit growing at 5.2%.

Like what Novan mentioned, our NIMs are bottoming out and is providing a lot of stability. The year-on-year contraction of 8 basis points is well within our guidance of contraction.

If you look at the Q-on-Q performance, that's underpinned by Malaysia NIMs expanding by 4 basis points Q-on-Q after the contraction that we had during the third quarter of 5 basis points, given during that period of third quarter of the policy rate cut. On our expenses, you can see what Novan mentioned in terms of it being well contained, growing only at 2% year on year.

If you look at it from a historical perspective as well, that has only grown by 3.1% on a four-year CAGR basis. That cost control has been ongoing and will continue going forward.

On the next slide, if you if I break it down further to some of the business segments on on PBT, just very briefly before we go into the business segment P&L later on, on Consumer Banking, the year-on-year performance was slightly down, flattish, but underlying that, if you look at NOII, that grew well at 14%, but this was offset by the prior year where we had a slightly higher overlay write-back in 2024. On a Q-on-Q basis, that's down because in the third quarter we had some lumpy NPL sale in Malaysia.

On Wholesale Banking, a very strong year, especially on TM, driving that year-on-year growth. In addition to that, we had some higher write-back coming through in Malaysia.

Q-on-Q, there was a very exceptional third quarter performance on trading, normalization of that impacted the PBT on a Q-on-Q basis. In addition to that, if you recall, we had quite a sizable recovery coming through in Malaysia on the oil and gas sector in the third quarter.

We did had a similar write-back in the fourth quarter in Indonesia, but that was smaller compared to the Malaysia write-back in the third quarter. On Commercial Banking, we did some, preemptive macro overlays, so that impacted the year-on-year performance in addition to some NIM compression coming through.

Q-on-Q, that was relatively flat with strong NOII being offset by by by higher higher cost. CDA and group funding are slightly lower on a year-on-year basis.

This is coming from higher opex and also slightly higher provisioning from Philippines, but within that, Touch 'n Go Digital has recorded a strong profitable trajectory coming from a small small base. Q-on-Q opex accruals that we recorded in the third quarter and the absence of that or the normalization of that in the fourth quarter has driven the PBT growth.

Moving on to the country performance, if you look at on slide 12, very good strong year-on-year profit growth in Malaysia. That's driven by NII growth with stable NIMs year on year with asset growth coming through.

Q-on-Q, it is slightly down, a normalization of the trading and FX, and also we had the lumpy NPL sale coming through in Malaysia in the third quarter, which was not repeated in the fourth quarter. Singapore, top line was driving that good growth on PBT with the top line growing at 6.9%, both on NOII and also NII.

In the fourth quarter, however, we did had also in the fourth quarter we had lower provisions driving that strong growth in terms of PBT. Indonesia, overall, it was challenging from a macro perspective, so that impacted our NIMs in the first half, which then, of course, impacted our year-on-year growth on PBT.

On the fourth quarter, we had lower NOII coming from the normalization of the trading and FX from a very exceptional third quarter, in addition to the absence of an NPL sale which we recorded during the third quarter. Thailand, somewhat similar to Indonesia, where the backdrop was challenging, growth was weak, and also we had some NIM pressure from the persistent rate cut in Thailand, so that impacted our PBT performance on a year-on-year basis.

Q-on-Q, we also recorded a lower NOII compared to the to the third quarter. On slide 13, breakdown of our P&L, firstly, NII.

Overall, we had a very good, quarterly NII momentum sequentially. You can see on on a constant currency basis, we grew well, close to 4% Q-on-Q, and that's driven by the NIM expansion, in particular coming through from Malaysia.

Two drivers are coming through from Malaysia on that NIM expansion. Number one, despite us, the first point, despite us having that typical, seasonal pressure on rates, both on retail and also wholesale, this is more than offset by our deposit rates coming off, coming from the policy rate cut from the third quarter, the full impact of that positive impact in the fourth quarter helped us drive that NIM expansion Q-on-Q.

Similarly, in Thailand and Singapore as well, that NIM expansion is really about how we managed to optimize our lower cost cost of funds. Indonesia, on the other hand, recorded a NIM contraction.

We had some, lumpy income coming through during the third quarter, but in addition to that, we had, a 75 basis points policy rate cut in the third quarter, the full impact of that, the full negative impact of that coming through in the fourth in the fourth quarter. On a year-on-year basis on constant currency, NII grew by 3.2%.

If you look at the NIM contraction, it's really driven mainly by by by two countries, which is Indonesia and also Thailand. Indonesia contracted NIMs by 20 by 4 basis points, and this is given the very tight liquidity and competitive environment in the first half of the year.

That slowly improved during the second half. The liquidity environment in the fourth quarter was good, we did see that liquidity improvement coming through, but however, because of the tough first half, that drove the NIM contraction, and also all the policy rate cuts that we had in Indonesia, and that is similar as well to to Thailand.

Also, in Singapore, where we had a NIM contraction of 18 basis points when SORA, moved by about 160, 170 basis points down throughout the year. Malaysia is is positive.

A flat NIM is positive given where the the rate cut came through in in July. This is through the active, balance sheet and liability management on both rate and also balances.

We managed to reduce our expensive wholesale funding by about RM5 billion compared to the start of of the year. Moving on to NOII on slide 14, 4Q is really a normalization of what was a really exceptional third quarter.

You can see the top left graph where there is a normalization on on firstly on our fee income and others. We had, a couple of NPL sales coming through in Malaysia and also Niaga in the third quarter, which wasn't repeated, that amounted to about RM170 million in the third quarter, which was not repeated in the fourth quarter.

Trading was also very strong in the third quarter, but you can see compared to on the right-hand side, the client franchise drop is not as significant as the drop in in trading, which dropped by 28% Q-on-Q. On a year-on-year basis, both trading and FX and also fee and other income grew more or less at the same level.

At the fees side, Singapore bancassurance really driving that fees. NPL sales on a year-on-year basis was relatively flat, about RM170 million, so that was relatively flattish.

Trading and FX, what Novan mentioned, is really driven by the client franchise business growing. Client franchise sales are growing at 7.2% year on year.

On slide 15, operating expenses, this is, like what I said earlier, this remains well under control. The quarterly movement is mainly due to the seasonal impact, firstly, on personal cost.

If you recall, we accrued a larger bonus during the third quarter because of the strong top line performance during the third quarter, the movement is really a normalization of that. Marketing and admin and general, this is the typical fourth quarter seasonal catch-up that we do as the activities ramp up during the fourth quarter.

Similarly, in terms of technology, we did some, accelerated depreciations of charges given the investments that we are making in technology. On the overall year-on-year numbers, like what Novan highlighted, on peak cost and technology cost, on establishment, we did some tactical cost savings during the start of the year given the view that we were having some headwinds on the macro backdrop, we did some tactical cost savings.

Marketing did decrease year on year given our focus on improving our group branding, and also some of the partnership costs in Philippines are picking up. Admin and general, if you exclude some of the one-off that happened in 2024, is really on an underlying basis that was a relatively low growth compared to the reported number that you see at 15.2%.

Asset quality on slide 16, this remains strong. On the total provisions on a Q-on-Q basis, that is slightly lower.

Recoveries is lower given the bigger recovery that we had in the third quarter on the Malaysia oil and gas name. In the fourth quarter, there was quite a significant one coming through in Indonesia, but that was lower than third quarter.

On the non-retail side, that came down slightly, and that is really driven by the underlying improving on on the non non-retail side, but also had some Singapore overlay write-back on a portfolio basis on the non non non-retail segment. On the retail segment, there is some underlying improvement in Indonesia and Malaysia on the ECL number itself.

We also had some MEF refresh coming through in Malaysia, which then resulted in the number coming coming down lower. On a year-on-year basis, the higher recoveries year on year is mainly driven by Malaysia and Indonesia.

On the non-retail side, it's really driven that slight increase is really driven, if you recall, we did some overlays related to macro uncertainties in the second quarter and also in the third quarter, so that drove the number a bit higher on a year-on-year basis. If you exclude that additional overlay that we did on the non-retail side on an underlying basis, that is actually relatively stable.

On the retail side, that has gone up slightly. Overlays again acting some of the variances.

Last year, we had a bigger, last year meaning 2024, we had a bigger write-back in terms of overlay on the retail side that has come off lower, and that drove the number higher. If you exclude those noises on overlay, on an underlying basis, Malaysia, Indonesia year on year is slightly lower, and also partly driving that slightly lower number is the model deployment.

If you recall, I mentioned in Indonesia and Malaysia, we deployed some models, and that resulted in some of the ECL coming in a bit lower on a year-on-year basis. Overall, you can see the numbers in terms of the ratios are all projecting well throughout the year with maintaining our loan loss coverage well above that 100% level.

Slide 17 is a new slide. This is to show our breakdown on our total asset growth as a total, our business franchise, and this is where we want to also break down the drivers of growth on the debt and securities level, so that has been, this a better reflection of our overall business and not just showing our our loan segment.

Here, you can see on a constant currency basis, like what Novan mentioned, our assets going at 6.1% and our debt securities growing at 9.2%, driven by Singapore and also Malaysia. On loans, if you look at it on a constant currency basis, growing at 3.1%, what we mentioned during the the third quarter, where we see, momentum picking up, you can really see that coming through in the fourth quarter.

In Wholesale Banking, the momentum picked up well and strongly within that number of 2.9%. Malaysia wholesale on a Q-on-Q basis grew by 5.8% Q-on-Q.

Consumer Banking on a Q-on-Q basis continued its growth trajectory, overall recording at 2.2% year-on-year growth, Malaysia being slightly higher than that 2.2%. Commercial Banking on a year-on-year basis, relatively flattish, but within that, Singapore is growing at 14% year on year on a on a local currency basis.

If you look at it from a perspective of country, Malaysia growing at 3.6% with consumer growing higher at 3.7%. Indonesia, the main driver of that growth is Corporate Banking and also the auto segment.

In Singapore, consumer and commercial both growing at 14% year on year. Thailand is actually negative across all all segments.

On deposit, on slide 19, the CASA ratio is relatively stable. If you look at it from a year-on-year perspective, we did do some optimization on the campaign rates in Thailand and Singapore during the quarter, and that drove the CASA number down, lower on a Q-on-Q basis.

On the other hand, you saw earlier, the NIMs in Thailand and also Singapore expanded. The second point here, you can see in terms of the CASA ratio, despite that coming off for Singapore and Thailand, the CASA ratio has remained relatively stable on a Q-on-Q basis.

Another driver of that CASA coming down is on the Wholesale Banking due to some year-end seasonality and some of the flighty CASA on the wholesale on wholesale side. Dividend payouts on slide 20, Novan has gone through this.

I just want to highlight one more point in terms of the dividend yield. That's at 5.7%.

Slide 21, our capital ratios on CET1 has remained fairly stable at that, above that 14% mid-level 14% of CET ratio level. Our liquidity ratios on the right-hand side remains very very plus.

On the segment PBT on slide 22, Consumer Banking, as you can see here, on a line-by-line basis, that contraction is really coming through on the operating income because of that lumpy sale on NPLs that we recorded during the third quarter. We did, however, have some offset to that with lower provisions given the MEF refresh that we did for for Malaysia.

On a year-on-year basis, on the operating income, on the on the NOII side, this is actually driving a good growth of 14% where there's the offset is actually on the NII side, which was weaker on a year-on-year basis. Provisions was higher, like what I mentioned, because we had a bigger overlay write-back in 20 2024.

If you exclude that, on an underlying basis, provisions actually fell in Indonesia and also Malaysia. Slide 23, Q-on-Q, Commercial Banking is relatively flattish.

We did record a good NOII growth during the quarter of about 9 9% for for for the for the business on a on a year-on-year basis. It is impacted by our conservative, proactive provisioning in terms of the macro overlays, it is higher on a year-on-year basis, but the business also recorded some NIM contraction.

If you look at the loan side, Malaysia driving that growth higher, but Malaysia is growing by 3.4%, the reported number is impacted by the currency translation. If you look at CASA, it's also growing very well for Malaysia and Singapore, driving that total deposit growth of 2% with Malaysia CASA growing close to 7% and Singapore CASA growing close to 15%.

On slide 24, Wholesale Banking, there's a normalization of an exceptional, third quarter in terms of trading and FX into treasury and markets. You can see that being reflected with the lower operating income.

In addition to that, there was a higher write-back coming through from Malaysia in the third quarter, a smaller write-back coming through in Indonesia in the fourth quarter impacted the provisions being higher as well. Year on year, very good, strong performance on PBT, and and this is driven by some of the provisions being lower in Indonesia and also Malaysia.

Slide 25, digital assets and and group funding, on a Q-on-Q basis, the growth is really coming through from a normalization of our opex, where we accrued some of those bonuses, higher bonuses in the third quarter. On a year-on-year basis, it's slightly lower because of the higher opex and also higher provisioning from Philippines.

If you look at Touch 'n Go Digital, that is growing very well and on a very good profitable trajectory. If you look at some of the indicators, that growth of number registered users is very strong at 11%, now ending the year at 32.3 million.

If you compare that to the third quarter, the growth is also strong, and that has remained the trajectory for many years. At in the third quarter, that number of users was 31.4 million.

In Philippines, in terms of customers, that grew strongly, close to 20%. However, on the loan side, we are bringing it down slightly with a slight negative growth of 1.3% year on year as we recalibrate the strategy of Philippines under Forward30.

Lastly, on Islamic on slide 26, it is impacted during the quarter performance on a normalization of the NOII, so that is slightly lower. On a year-on-year basis, a very good growth driven by the asset growth and stable NIMs.

Provisions as well was lower, you can see in terms of the financing growth, it continues to outpace the conventional growth, growing at 6.4%, and the Islamic deposits also tracking similarly on the on the on the on the financing side. That's the end of the financials.

Thank you, and I pass the presentation back to Novan for the for the closing.

Okay. Thank you, Khairul.

How do we see 2026? I think FX will continue to be a headwind.

Malaysian ringgit vis-a-vis all the other ASEAN currencies, we feel that will be a headwind for us. However, we are not allowing that noise to distract us, the team continues to be extremely focused doing what we do best and to execute the 4Cs.

Therefore, our target ROE for 2026 will be in the 11% to 11.5% range, and we are on track to achieve our 12% to 13% ROE in 2027, which we guided earlier to be our mid-term checkpoint for Forward30. What is driving the 11% to 11.5% ROE guidance?

We are looking at an asset growth on constant currency basis of 5% to 7%, our cost-to-income ratio to be below 47%, credit cost to be 25 to 35 basis points, and our CET1 ratio to be at least equal to or above 14%. With that, I will now end our presentation and take any questions that you have.

Thank you, Novan and Khairul. We will now begin the Q&A session.

Just a reminder, if you would like to ask a question, please use the raise hand function, and we will unmute your line. We have the first person, it's Yong Hong.

Yong Hong, please go ahead.

Hi, Novan. Hi, Khairul.

Just three questions for me. Thanks for the 2026 guidance, but if you are targeting ROE to be broadly the same level as 2025, what are the levers to get to 12% for 2027?

Earnings-wise, if that is slower than our expectations, any other levers that we can pull to get to that 12% level in 2027? That is my first question.

Thank you, Yong Hong. The journey to 2027, we have a number of levers.

First, with regards to our capital allocation itself, which you will see a lot more focus on the Malaysia business. You saw earlier on page 6, the Malaysia ROE has increased from 11% to 12.1%.

We're going to be focusing to grow a lot more in Malaysia vis-a-vis the other markets, which is namely Indonesia and Thailand. You're going to see a lot more capital reallocation from Thailand, to some extent Indonesia, a lot more into Malaysia, which is generating above 12% ROE.

Our focus in Singapore will remain the same if not slightly higher, where ROE is now at 18%. Think of capital reallocation from Thailand, Indonesia into Malaysia and Singapore.

That's the first lever. Then within each of these countries, there's going to be a lot more relentless focus on non-interest income.

The focus on the wealth business, focus on our wholesale business with Singapore as a wealth and treasury hub, focus on transaction banking, which will facilitate our CASA business, all that will grow NOII. Treasury client sales, that you saw very strong growth this year versus previous years.

A lot more client franchise NOII, which will also boost our ROE. We're going to continue that discipline on cost that you have seen.

You have seen over the last 10 years, opex growth is roughly about 3% CAGR. Last year was 2%.

We're going to continue with that discipline on cost. We're going to continue with the discipline on asset quality.

You saw GIL at the lowest ever for CIMB, credit cost to remain contained. Then on the capital side, we announced the capital return program up to end of 2027.

We're going to execute that. I think when we put all these levers together, we are confident of achieving the 2027 ROE guidance.

Yep, just following up on that capital. To get to that ROE, can we maybe have the thinking that the capital return will be earlier, if not front-loaded, so that basically that will give us a better base to get to the ROE target in 2027?

Is that a right way to think about that?

Yes, we always proactively think of capital. We value the capital from our shareholders a lot, and therefore, we always proactively thinking about how to return it faster.

This is excess capital that we have committed anyway. You saw what we did in the last quarter where market was not expecting us to do a special dividend, but we chose to do a special dividend earlier ahead of time.

You saw how we executed this over the last two years, where we had excess capital and we returned that as special dividends. We're going to continue executing this, like how we've executed in the past.

At the end of the day, it's a balance of many factors that we need to take into account, and we will continue to be vigilant about it.

Thanks for that. Maybe on margins, I may have missed that earlier.

Is there any guidance on margins for this year?

Yong Hong, in terms of the margin guidance, right, for the group, we are looking at plus-minus 5 basis points. Relatively stable, plus-minus.

Within that, I think more importantly, if you look at Malaysia, we're looking at Malaysia to be stable to slightly expanding, right? Niaga has given their guidance is a plus-minus 10 basis points to 3.9% to 4.1%.

Where we see potentially some further weakening is Singapore, right? Singapore, but I think it would be less than what we recorded in 2025 as what you saw, SORA, even though weakening, has stabilized compared to what we've recorded in 2025, there should be some weakening on that.

I think where the offsets to this is really Malaysia, where we're looking at stable to slightly expanding, because in terms of our rate outlook in Malaysia, right, we are expecting rates to be stable versus the negative impact that we had in 2025, so that's number one. Number two, to the point on our CASA strategy, that will continue to gain traction going into 2026, and that will help our margin trajectory.

Lastly, we continuously optimize the higher cost of funding, wholesale funding that we did. We managed to do that already for the last couple of years.

We'll continue doing that again in 2026 as well. Just as a number, last year in 2025, we reduced our wholesale funding by about RM5 billion on the end point to end point, we'll continue to try and optimize that expensive funding in 2026 as well.

That will help that margins in Malaysia to be stable to slightly expanding. Overall, just to recap, at the group level, we're looking at plus-minus 5% 5 basis points.

Yep, just a small follow-up. What are the scenarios where you see margin expanding by 5 basis points, and what are the scenarios that you see margins coming down by 5 basis points?

I think the main lever is because, I think, two parts, which is our two biggest markets. One is Malaysia, the other is Indonesia.

If you look at Indonesia, the range is plus-minus 10 basis points. We have seen liquidity environment improving in Indonesia over the second half, and that has been sustained in the fourth quarter.

Similarly, in the first so far, that liquidity environment has been stable. I think we still have a long way to go to the end of the year, so that liquidity has to be there, competition has to be fairly rational for us to get to the upper end of that range where Niaga has guided.

That's number one. Number two, our biggest market will be the biggest driver, which is Malaysia.

Far, liquidity has improved slightly if you look at it from this year starting of the year. The continuation of that maybe could give us some slight upside to margins in Malaysia.

That will drive the upper end of our guidance.

Thanks, Novan. Thanks, Khairul.

Thank you.

Thank you.

Thanks, Yong Hong. The next question comes from Harsh.

Harsh? Harshvardhan?

Hi, can you hear me?

Yep.

Hi, thanks for this. Just one question.

I understand your payout was in line with guidance, but how do we think about your guidance on regular moving over next couple of years? Special, I understand, as you have guided for a number, you have already started paying, and you'll do it as you can release.

That's as it comes through, you'll do. Special is 55 the number we should plan for over next two, three years, or even that number can increase meaningfully over next few years?

Thank you. I think

in terms of our dividend payout of 55%, we've been sustaining that for the last three to four four years, and looking at the growth trajectory and giving that stability to the market, I think we need that number to be a sustainable number, a really sustainable number. That sustainable number is really driven by all the entities within our group on how we extract that capital to the holding level.

We believe, based on our trajectory, right, this is the sustainable number of 55%. We do continue reviewing this number, and if you look at our guidance, it is stable at that 55% level given how we have optimized all the capital levels in all the entities.

Right.

Basically, unless and until there is any release of capital, be it Thailand, be it Basel norms or what have you, or maybe higher payout from Niaga, above and beyond your RM2 billion commitment at 55%, we should not pencil in anything else. Yes.

Based on today's view and outlook on growth and what excess capital we can expect from all the various levers that we have both Malaysia and outside Malaysia, this is the level that we are comfortable with in terms of 55% and also the capital return that we have committed up until the end of 2027. Nothing beyond that at the moment, yeah.

Khairul, if I just want to double-click on that, if, let's say, assuming that the about RM1.3 billion, RM1.4 billion remaining on special out of RM2 billion, that comes out from, let's say, optimizing capital elsewhere and narrowing that gap between group and bank to an extent, is 55% enough to optimize your returns, ROEs in particular, or you can push up to 60%, 65% over a couple of years?

The basis of this 55% is more or less with the current sort of projection of CET1 and outlook, right? We are maintaining a stable capital ratio broadly across all our entities, including GH, with this 55% payout, and on top of that, that capital return that we have committed.

If you want to optimize further, right, it depends on many other levers. If we can optimize our CET1 further, that's where there could be that potential higher dividend payout firstly from all our entities, then hopefully that can translate to a higher payout at GH as well, at group holdings as well.

All right, thank you.

Thanks, Harsh. We do not have any further questions at this point in time.

Please do use the raise hand function, guys, if you wish to ask any questions. We have one coming from Tushar from Nomura.

Tushar?

Hi, good afternoon. Thank you for taking my question.

The first question is on Indonesia and Niaga. Given the developments in Indonesia, the increased scrutiny on free float and the discussion that Indonesian stocks might need to increase free float to 15%, what would be your considerations in deciding whether to sell in the market or do a dividend in specie like how it had happened in 2016, I believe, when the previous round of free float increase was required?

Thank you, Tushar, for your question. At this point in time, yes, there's the talk of the 15%.

There is no policy in terms of how it will get there at the moment. I think the indication is over a period of time.

From our perspective, all options are on the table. If there's requirement to then increase our stake, then we will consider all options, whether is it a re-IPO in the market or whether is it a DIS.

It all goes back to which one gives us the best value. The reason I mentioned the word re-IPO just now is because today, Niaga at 7-over percent free float, the liquidity is thin.

The trading doesn't reflect the true value of the business, which is achieving 13-over percent ROE. Therefore, if we were to ever want to consider increasing stake via selling some stock, then it needs to be via a full on marketing process.

At the end of the day, all options are on the table for us, and we will execute the one that extracts the best value.

Thank you. Just want to understand the minimum CET1 required by end of 2026, which you are targeting at greater than 14%.

I understand that the structure of CIMB is a bit different, where dividends are paid out of group holdings level, group holdings CET1 is more important. Is it fair to say that group holdings, this kind of structure versus all of your peers where bank-level CET1 is more important, you need to maintain a higher group holdings level CET1 versus others where bank-level CET1 can be lower?

The answer, Tushar, is no, it's similar. It's similar, it's the same, right?

Whatever capital levels because we are governed by Malaysia Central Bank. Whatever capital levels that's required at CIMB Bank, CIMB Islamic, CIMB Investment Bank is similar to CIMB Group Holdings.

It's not more that's required at the holding level.

Okay. Thank you.

Those were all my questions.

Thanks, Tushar.

Once again, if you do have any questions, any burning questions you'd like to ask, please do use the raise hand function. Next question comes from Benjamin from UBS.

Hi, Ben.

Hi. Thanks, Steven.

Hi, Novan. Hi, Khairul.

Thanks for this opportunity. I just have one quick question.

Just now you mentioned that the stronger ringgit has been a headwind to the performance at CIMB. Just wanted to get some rough sensitivity, let's say if the ringgit were to strengthen another 5% or whatever number you have in mind, what is the downside to the ROE guidance that you have, that would be helpful, or if Malaysian ringgit were to depreciate versus basket of currencies regionally, what would be the impact on your earnings and your ROE?

Thank you.

I think the sensitivity is relatively mechanical, right, given the contribution of Niaga and our overseas operation. Niaga actually the one that is impacting us the most with the PBT contribution of that 22%, right?

To a lesser extent, a very small component in terms of US dollar, but it's not material driver. The main one is actually Indonesia and to a certain extent, Singapore as well, right?

If you look at how we have managed that, which was very challenging in 2025, we're still within that 11% to 11.5% ROE, right? That is a reflection of our diversified business, with Malaysia performing very well in terms of the ROE expansion on a year-on-year basis.

Of course, we are susceptible to that sensitivity that you mentioned, but we are going to be very agile to still focus on meeting our guidance of 11%

to 11.5%. I think the answer is actually there's no impact lah.

We're not speculating on the FX. We'll focus on executing and doing what we do best.

As FX move, it then impacts our numbers, and we will see how that impacts our numbers, and therefore, we will be agile and we will pivot our strategies accordingly. Whatever it is to make sure that we achieve what we have guided the market.

Thanks, Khairul. Thanks, Novan.

I think, yeah, there are no further questions at this point in time. Hang on, yeah, Andrew Song from Macquarie, are you there?

Yep. Hi, happy Friday.

Just a question on your guidance. I noticed that in terms of what you put down asset growth guidance instead of loan guidance, curious, is that something more to be read into that?

Sorry, can you repeat that? I think you broke up just now.

In terms of the guidance that you mentioned, the asset growth guidance that you put down, yeah, in terms of what you put down, it's 5.5% 5% to 7%. Is there any difference with loan growth guidance?

Can I just

translate that to loan growth guidance? Okay.

Sure. The reason why we put asset growth is, that's how we operate our business.

From our capital and deposits that we have, we then mobilize it into either loans or either through securities. We are a large universal bank, that's also a strong investment bank.

When we advise our customers to raise financing, it's the financing that makes most sense for them. If a loan makes more sense, we extend a loan.

If a bond makes more sense, then we advise them on a bond, but we can also use our balance sheet to underwrite part of the bond. If an equity makes more sense, then we advise them to raise equity.

That's why we are focused on an asset growth guidance rather than just too narrowly focusing on loan growth per se. With regards to our own internal numbers as part of this 5% to 7% asset growth, loan growth is a subset of that.

If I were to look at Malaysia, which is our largest market, we are looking at growing loans at about 4% to 5%, which is in line with the GDP, and it will differ across all markets. At the end of the day, our business plan is around an asset growth strategy.

Sorry, can you remind me what the loan growth guidance is for Indonesia and Thailand as well?

Yeah. Indonesia is 3% to 5%, right?

Singapore will be in the higher single digit, and that's driven mostly by SME and also consumer. In Thailand, we are expecting the market environment to still remain fairly challenging, in Thailand it'll likely be a negative growth.

This is on loans specifically, but again, I just want to reiterate, we are looking at it more from an asset in totality from all the countries as well.

Got that. Thanks.

Can I just

We're a very big bond house, right? Therefore, when we make NII, the cash that get deployed either through loans or through securities, we still make NII on that.

Just that the bonds then allow us to trade it as well. That's why we're going on an asset growth basis, just want you to understand that.

Understand. Thank you.

Just a follow-up on the Malaysian loan growth of 4% to 5%. Can you help me understand?

The GDP growth has been strong, and we should be seeing GDP growth in the high 4s if not 5% in terms of forecasts for this year. At the same time, you're focusing growth more on Malaysia going forward.

Why is loan growth only at 4% to 5% for Malaysia?

Again, we're a universal bank, which includes a large investment bank. Our clients in Malaysia, they raise financing either through loans or through the capital markets, which is the bond market.

The Malaysian bond market grew a lot more compared to the loan market last year, and we are number one player in the bond market. From our perspective, it's all about what makes sense most for our customers.

If it's a lot more efficient for them to raise bonds, and we did a lot of bonds for our top clients last year, then we will advise them to raise bonds, but we will then underwrite part of the bonds, and that goes to our balance sheet. That's why the focus on asset growth.

I would like to take your focus away from just loan growth alone, because that's not how we operate our business, unlike maybe some of our peers. Look, at the end of the day, if it makes more sense for our customers to do loans, then you will see the loan growth number grow a lot more.

I don't want to be too fixated on the loan growth number.

Thanks for that. Just a follow-up on that again.

Then how should we think about NOII as a percentage of total income or NOII growth for this year then?

I think for this year, right, if you look at it from a numbers perspective, where we ended the year in terms of proportion at 31.7%, right, given our focus on two things, right, one is cross-sell, on the client franchise component, but secondly also on the bond side that also created a lot of opportunity on NOII, we do expect NOII to grow stronger than NII, and that is somewhere slightly higher than the mid-single digits of a level for NOII. That proportion, we are targeting that to expand further in 2026.

Expecting NOII to grow stronger than NII, and that's also including the fact that you might have a higher base in terms of bond sales from 2025?

Completely, yes. Yes.

That's not the main reason, yeah. Our NOII growth, as I presented earlier, the client franchise part grew faster than NOII itself.

In fact, if you look at earlier page 14, last year, our client franchise of trading and FX is actually higher than our trading income. Yes, there will be trading gains, we will take trading gains as they come, but the focus is on client franchise business, where we make treasury client sales, where we make fees and commissions from either our banking products, our investment banking advisory.

The contribution of NOII will come from both, but I would say a lot more on the client franchise side.

Understand. Thank you.

Thanks for that.

Thank you.

Thanks, Andrew. Just one more I think from Chin Han from Affin.

Chin Han?

Hi,

I have just a couple of questions on Singapore. I may have missed it, but could we get the in-house view on where SORA rates are going and what's underpinning expectations for 2026, as well as a little bit more color on credit cost for Singapore?

If you could share any numbers would be great.

I'll take the credit cost numbers first for Singapore. I won't share specific number, but in terms of directionally, right, in 2025, we recorded quite a significant net write-back in Singapore.

Going into 2026, we still expect the credit cost for Singapore to be relatively flattish, meaning not a write-back position, but a very, very small credit cost, as there are some pipelines of further recoveries coming through in 2026. Very small credit cost number.

On the point on SORA, right, we have some views on where it will go. We're looking at around 50 basis points further lower also.

Great.

On the year, yeah.

Great. Thanks so much.

Thank you.

No further questions at this point in time. As there's no further questions, I'd like to pass the mic back to Novan for his closing remarks.

Thank you very much for your time on a Friday afternoon to join our presentation. For those that are fasting, I just want to wish you selamat berbuka puasa and see you all again soon.

Thank you very much.

Ladies and gentlemen, that concludes our briefing for today. Thank you for joining us, and wish you a good evening ahead.