Stock Name: CIMB
Company Name: CIMB GROUP HOLDINGS BERHAD
Research House: OSK
Company Name: CIMB GROUP HOLDINGS BERHAD
Research House: OSK
OSK Research is maintaining the "buy" recommendation on CIMB Group with the trading price at RM9.77, underpinned by its sustainable return on equity (ROE) of 17.4 per cent for this year.
In a note today, OSK said the group's ROE had in the past been relatively volatile, hitting a peak of 20.2 per cent in 2007, when it registered record trading profits largely from its bond division.
But it plunged to 11.9 per cent the following year due to significant mark-to-market losses from the same division.
Although CIMB will continue to build on its market leading domestic and regional investment banking franchise, OSK believes that the fast growing regional consumer banking business and the associated transactional fee base income from the domestic and cross border regional angle, will be crucial towards achieving a more sustainable and stable ROE growth.
The research firm said the group has set a five-year target of expanding its consumer banking contribution from 17 per cent currently to 60 per cent. -- Bernama
In a note today, OSK said the group's ROE had in the past been relatively volatile, hitting a peak of 20.2 per cent in 2007, when it registered record trading profits largely from its bond division.
But it plunged to 11.9 per cent the following year due to significant mark-to-market losses from the same division.
Although CIMB will continue to build on its market leading domestic and regional investment banking franchise, OSK believes that the fast growing regional consumer banking business and the associated transactional fee base income from the domestic and cross border regional angle, will be crucial towards achieving a more sustainable and stable ROE growth.
The research firm said the group has set a five-year target of expanding its consumer banking contribution from 17 per cent currently to 60 per cent. -- Bernama
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