Cimb Group Hldgs Bhd Ord

Good afternoon, ladies and gentlemen, and welcome to CID Group's Financial Resource Briefing for the second quarter of 2026. Our host today is CID Group CEO, Noban Ameruddin, and Group CFSO, Khairul Ripai. My name is Steven from the CID IR team. You should have received the analyst presentation and financial statements via email from the group IR email. Otherwise, you may find the documents in the IR section of our website at cib.com. Please be informed that this briefing is being recorded. Also, please include your name and copy on the Teams app to allow us to identify you. All participants' slides 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 Norman and Cairo. Norman, over to you.

Thank you very much, Steven. Good afternoon, everyone, and thank you for joining us today. I am pleased to share our second quarter 26 performance. It has been a very resilient performance. In fact, we're seeing very good momentum as we move from the first quarter to the second quarter. So for the second quarter, we delivered a net profit of RM1.94 billion, which then translates to an annualised ROE of 11.2% for the quarter. And the earnings momentum that we're seeing is as a result of the transformation activities that we have been doing with regards to Forward 30, which we started. Group Hldgs Bhd With regards to capital, we have been assessing the underperforming businesses within our portfolio. We've been assessing businesses where, you know, would have difficulties in terms of scaling up by 2030. And we're taking very, very decisive actions. We started with the divestment of our Thai auto business, which we scheduled to complete on schedule by the fourth quarter. Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd On the cross-sell side, a lot of focus on our regional wholesale presence. We've made a number of new hires across the bank. We're operating wholesale very differently, very centrally focused. That has basically allowed us to capture a lot of the opportunities that we're seeing coming up in the recent structural shifts that we're seeing across ASEAN. mainly on the AI data centers, wealth, as well as cross-border trades. These three themes are basically driving a lot of the growth that we see in the momentum that we have in the second quarter. And then on the capability side, a lot of focus has gone in over the last one and a half years to make ourselves simpler, better and faster. It's about making our processes more efficient and then once the processes are more efficient, we then apply technology and AI to make it better. We're starting to be able to extract value from the simpler matter faster transformation by reducing cost. Cost is coming down. If you look at our cost over the last couple of quarters, it is trending down and we expect effects to come down some more. But all in all, the transformation exercise under Forward 30 with regards to the 4Cs, is taking shape, it is accelerating, it is creating a differentiated franchise for us, which then allows us to capture the growth opportunities that we are seeing. So despite the challenging backdrop, despite what everyone is seeing in Indonesia, despite what people are seeing in Thailand, The transformation exercise that we have has been able to mitigate all these challenges. And therefore, for the second quarter, both NII and NOII are up quarter and quarter. Impact on the NII side is really bled by growth in assets and loans, up 2.2% and 1.1%. Hldgs Bhd Ord NYI saw 6% growth quarter and quarter, mainly driven by the themes that I mentioned earlier around wealth and cross-border. So we're seeing higher franchise fees and we're seeing a sustained level of client sales momentum, whether is it in the wealth business or whether is it in the treasury client sales business. And then our transformation to become simpler, better, faster. I mentioned earlier about the OPEX declining. Cost-to-income ratio for the quarter is 45.2%. As the quality remains stable, Jio has improved to an all-time low of 1.6%. As a result, we are declaring a dividend of $0.1965 per share, which translates to a payout ratio of above 55%. Our CEP1 is at 14%. So some examples of what we have introduced under Forward 30 in the second quarter and all these are done to really differentiate ourselves versus our peers. First is to make sure that we can capture the opportunities that's arising from the structural shifts in ASEAN. Three main themes that we saw, AI data centers, wealth and cross-model corridors, and we're positioning ourselves within each of these areas to make sure that we can capture all this growth. In fact, the asset load growth that we're seeing, quite a sizable proportion of it is coming from the AI and data center space. We introduce a new private wealth segment to co-exist in between the preferred and private banking segments that we already have and this is really to tap into a customer segment that we haven't Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd Ord Hldgs Bhd Ord Something very different compared to what else is on the market today. In most banking apps, you will need to decide yourself what to invest in over the hundreds of products that's available. But on Opto, it's very advisory focused and it's available to everyone. Cross-border corridors, I've mentioned this previously, our commitment in JSSCZ with regards to our 10 billion loan commitment, we are outperforming on that side, a lot of it linked to data centres, as well as our ASEAN financial passport programme. We've announced a number of partnerships and MOUs with regards to China and ASEAN, both with financial institutions. We continue to double down on our very successful Singapore-Malaysia corridor. The most successful product at the moment is our FX proposition. There's a lot of Malaysians working in Singapore. They send money home back every month. We guarantee you best FX rates. As a result, customers open Casa account with us in Singapore and Malaysia. One area that we are double-downing on and we increased the intensity this second quarter, in fact we introduced two new products, is really to increase the leveraging between CIMB platform and Touch and Go platform. This is where CIMB is unique, no other peer in Malaysia. It's both a universal bank as well as the national e-wallet. We have the benefit of both and we are leveraging on both platforms. 2 new services that we introduced this second quarter. First is the ability to invest in gold via the Touch & Go app and this service is provided by CIMB. Secondly is if you're an SME business, you use Touch & Go for collections today, you can then also apply for working capital financing via the Bizcash feature on Touch & Go app. You click on the app, it then directs you to CIMB. Thirdly, this is something we announced yesterday. We believe this is the future of financial markets and this is tokenization. It has been a four-month journey for us. In April, we were advisors to Kazanah, who pioneered tokenized Sukuk issuance in Malaysia. Given that was the first issuance, we started small. We started with $100 million with a few institutional investors who invested via fiat currency. But what we did yesterday, we took it to the next level. We used the CIMB bond to be issued in tokenized format instead. So of the 1.68 billion issuance, 1.38 billion was issued in tokenized format. It was issued to 12 institutional investors and those investors subscribed for our sukuk using a CIMB tokenized deposit. So this is the evolution starting from the Kazana pilot to now the CIMB pilot. We are the first Malaysian bank to do so. But we are double downing on tokenization because we do believe this is the next financial market innovation that will come through over the next coming years and we want to make sure that we are the first to innovate The next step for this really is to move from pilot phase to practical execution. So with that summary, I will now hand it over to Cairo to go through the rest of the presentation. Cairo, over to you.

Thank you, Novan, and good afternoon, everyone. So firstly, what I'll go through is the second quarter key highlights in terms of the financials on slide six. A few key points here that I want to highlight. Firstly, the strong NRI growth that Novan During the second quarter, we also took some conservative view in terms of our overlays, and that has resulted in our credit costs being at 38 basis points during the quarter. If you go to the next slide, on slide 7, on the full half-year basis, the additional overlays that we took during the second quarter, the half-year annualized credit costs is at 34 basis points. The strong NOI growth that continued during the second quarter has translated on a good year-on-year number where the proportion has expanded by 1.3 percentage points. Coupled with the strong total asset growth on a constant currency basis at 6.3% year-on-year, this has mitigated Other highlights that I wanted to share, if you move to slide 8, firstly, just giving more color on that NOI growth. So this is the second quarter where we recorded good sequential growth on NOI. So if you look at the left-hand chart, During the first quarter, NOI sequentially grew by 11.9%. In the second quarter, NOI sequential growth was also strong at 6% QoQ. So this really drove our total income growth of 2.8% coupled with the fact that total asset growth was good at 1.8% QoQ. So this overall mitigated that four basis points margin compression that you see on the line chart at the bottom. We have been saying that FX translation has had a negative impact in terms of growth on our reported number. However, if you look at our underlying performance on a constant currency basis, those time charts are depicting the year-on-year growth of both Operating Income and Net Profit. And both trend lines you can see in terms of our Operating Income has been resilient on a year-on-year growth basis on constant currency hovering around that 4% level. Similarly on Net Profit that has been relatively stable except for the first quarter but overall is still hovering around the 4-5% growth level. On cost, this is where we have exercised very good cost controls where both on a Q&Q and year-on-year basis our cost has come down. Moving on to the next slide, slide 9, this is some of the key highlights from business segments. Firstly, on consumer banking, the strong growth on a QMQ basis is really driven by wealth and also other income, NOI growing by 10% QMQ driving that PBT growth. On a union basis, consumer banking did face some margin pressure, and this is coupled by the absence On wholesale banking, both on a QMQ and year-on-year basis, the growth is mainly driven by robust treasury and market total income growth. However, during this year, we also had some recoveries in Singapore and also Indonesia contributing to that PBT bottom line growth. On commercial banking, QoQ, the absence of an overlay writeback and recovery in the second quarter versus the first quarter resulted in PPT being lower. On a year-on-year basis, debt recovery during the first quarter of 2026 also contributed to the overall half-year growth on a year-on-year basis, coupled with the fact that the client franchise NOI number was stronger for commercial banking year-on-year. On CDA, both on the Q&Q and year-on-year number was impacted by some of the central OPEX that we took during the second quarter which was related to the Thai transformation restructuring and also some of the central expenses Next slide on our country, Malaysia. View on view, the top line growth is strong at 9%. This is however offset by the timing of our products and bookings of overlays. So that moderated the bottom line growth to 1.1%. On a year-on-year basis, similarly, the timing of the overlay write-backs and overlay charts impacting the bottom-line growth. However, if you look at it from a top-line perspective, Malaysia top-line grew by 3.7%, with NRI exceeding that, growing at 4.3%. Singapore QoQ, we did have a legacy recovery coming through during the second quarter driving that PBT growth on a year-on-year basis in addition to that second quarter 2026 recovery. Banker wealth also grew well on a year-on-year basis. Indonesia, overall, we had some challenges in terms of NRI, impacting some of the moderate NRI growth for both Gyeonggyu and Yeonyeo. We did also record lower recoveries, where in the first quarter we recorded a lot more writebacks. Similarly, on the Yeonyeo basis in 2025, there were a bit more writebacks coming through, so the absence of those impacting the bottom-line performance. Thailand QMQ is related mostly to the restructuring cost that we booked during the second quarter. On a year-on-year basis overall, driven by the transformation that we are doing in Thailand, we are seeing better OPEX year-on-year and we are also seeing lower ECL year-on-year driving that stronger PPT performance. On slide 11, breaking the P&L down firstly on NRI. So you can see our NRI growth is good at 1.3% QoQ despite the margin pressure of 4 basis points. If you break down that margin pressure, firstly it's coming from Malaysia, coming down by 6 basis points. And this is mostly driven by higher cost of deposits, predominantly on the wholesale side as we find In Indonesia, on the headline, we are reporting a slight expansion in margin by two basis points. On an underlying basis, we do see some pressure given the competition on FDs and also Thailan Thailan the the Our NRI is mostly due to APEX's translation. The total asset growth has been good. If we all look at it on a constant currency basis, our NRI did grow by 1.7%. Margins did contract by 10 basis points. That's mostly driven by Indonesia because of the backdrop and also the interest rate highs. In Singapore, the significant SORA movement had impacted our names as well. On the other hand, if you look at Thailand, We managed to expand our margins quite decently. In Malaysia, we did see a bit of margin pressure of 3 basis points and this is related to the second quarter movement. I think it's important to highlight for Malaysia, we did get an interest rate cut in July 2025. So the comparatives will start to Just to recap, in 2025, on a full year basis, our margin in Malaysia is at 1.78%. So at the moment, we are just slightly down compared to the full year of 2025 of 1.77%. Moving on to NOI on the next slide, you can see in terms of the driver for the quarter is coming from firstly fees and commission that's mostly coming through from wholesale banking. We are sustaining a good level or high level of wealth and also client sales numbers. Hldgs Bhd Ord Hldgs Bhd Fees and commission is down mainly because of corporate fees being weaker in Singapore. Wealth is mostly driven by Singapore and Malaysia. Trading is flattish, whereas flying sales treasury continues to outpace the trading side, growing by 4.3% year-on-year. I'll give a bit more colour in terms of the other income line. The other income line, last year in 2025, we did in Malaysia of RM100 million. This year in 2026, during the second quarter, we did record a lumpy non-recurring other income in Malaysia of RM100 million. So if you exclude both of that during the two years, there is a slight increase of RM100 million under other income and that's related to mainly two things. One is brokerage income did increase slightly, that's number one. Number two, the foreclosed assets, Operating Expense Hldgs Bhd Ord Hldgs Bhd In terms of our investment, that continues to be the case with our tech CRR being maintained around the 8% level. Moving on to slide 14 on asset quality, from an overall perspective, that remains stable and an underlying number. But if you look at the PNL-Isiang movement, so I'll break this down on segment by segment. If you look at retail, firstly, we did have some overlay right back last quarter. And then during this quarter, we reallocated that overlay Hldgs Bhd Ord Hldgs Bhd Hldgs Bhd Ord Hldgs Bhd On the recoveries, we did record significant recoveries both in Indonesia and Singapore So similarly, on a year-on-year number, retail is predominantly driven by the timing of the overlay. Last year, we had a RM200 million overlay right there. That's number one on the retail side. Number two, if you recall, I did mention that we had a model enhancement and that Hldgs Bhd Ord The increase in recoveries that's related to the second quarter number which is the Indonesia and Singapore. I think most importantly if you look at our gross impact loss ratio on an underlying basis that has continued to slightly improve during the quarter and our allowance coverage is close to the 100% level. On the next slide, slide 15 on total asset growth Apart from loans, debt securities was a major driver and that's mostly coming from Malaysia and Singapore On gross loans, on slide 16 If we break it down by the segments in consumer banking, both QMQ and New Year, that's driven by Malaysia and Singapore. Commercial banking, both QMQ and New Year, we have relatively robust growth in Singapore. It's still fairly moderate during the quarter for Malaysia as what we had seen in the first quarter on commercial banking. Wholesale banking is a big driver. Overall, during the quarter, it's mostly coming through from Indonesia and Thailand, wholesale banking. On the year-on-year basis, that's mostly coming through from Malaysia, going at 8.1% year-on-year. Breaking it down by country, Malaysia, consumer growing at 4.3%, Malaysia wholesale growing at 8.1%, Indonesia, that growth is mostly driven by wholesale banking, whereas consumer is slightly contracting. Singapore, consumer Singapore growing at 14% year-on-year, and commercial banking growing at 11% year-on-year. In Thailand, the headline negative growth is really driven by consumer, offsetting that is wholesale banking. On deposits, on slide 17, growth on CASA continues to be positive at 40 basis points. For the second quarter, commercial banking has done very well across our key operating markets, driving that growth. Similarly, Thailand wholesale banking also driving that growth. Hldgs Bhd Ord Hldgs Bhd Slide 18 Dividends, as what you've already heard, we maintain our payout of 55%, which is equivalent to RM2.1 billion. On slide 19, in terms of our capital and liquidity, debt remains very strong, with our liquidity profile further improving. Now, breaking it down on slide 20 on performance by segment, firstly on consumer. Hldgs Bhd Ord Hldgs Bhd is actually growing by 12% year-on-year. Peace is one component of One Wealth. The second component is the other income that's driving the strong NRI growth, partially offsetting the NRI pressure that we see on a year-on-year basis. And on the bottom line, where on a year-on-year basis it's negative is because of the absence of the ramp-back that we had in terms of overlay and also the model enhancement that was recorded in 2025. On Gross Loans, the bigger driver is Malaysia at 4.3% and also Singapore growing at 14%. KASA Malaysia is driving that growth at 4.3%. Commercial Banking on slide 21. During the quarter, NORI on fees and effects On the PVT number being lower, we did have a right back and also recovery, overlay right back and also recovery during the first quarter. And during the second quarter, we did reallocate some overlay. On a year-on-year basis, the flat-ish growth on operating income is driven by margin compression. NOI is also lower because we had some MPL sale gain in 2025 in the commercial business. But like what I said, in terms of fees and effects, the operating The cross-loans at 3.3%, that's mostly driven by Singapore. Malaysia remains fairly weak at 1% growth year-on-year, a reflection of the environment and also some of the timing of disbursements. On KASA, that strong year-on-year growth is across our key operating markets of Malaysia, Indonesia, Singapore and Singapore. Side 22, on wholesale banking, Hldgs Bhd Ord Hldgs Bhd Cross Loans, mostly driven by Malaysia at 8.1% Indonesia during the second quarter was also strong Kasa Growth, mostly driven by Malaysia, growing by 13% year on year CDA and Group Funding on slide 23, those central costs that I mentioned related to the transformation costs in Thailand and also some of the central costs in terms of provisioning on costs on OPEX, you can see that has translated to the 25% Hldgs Bhd Ord Hldgs Bhd Ord So lastly on Islamic on slide 24, the operating income growth is mostly driven by NOII. A lot of the overlays being done at Islamic impacting the bottom line growth. You can see both on a Q and Q and year on year basis. Financing continues to be good, mostly driven by Malaysia consumer. A lot of the FDs or term investment account here that may be of 9.2% per year. So with that, that's the end of the financials. Thank you, and I pass the presentation back to Nobret.