CIMB Bank (CIMB) today entered into a sustainability-linked derivative (SLD) transaction with Standard Chartered Malaysia in the form of an interest rate swap with a notional value of RM2.45 billion for hedging purposes.
This landmark SLD transaction has been structured to involve a pricing mechanism whereby a discount (cost reduction) or premium (penalty) will be applied depending on whether CIMB Group achieves pre-agreed sustainability performance targets.
This SLD offering extends CIMB’s track record as an early mover in sustainability-linked instruments in the ASEAN region. CIMB has been actively providing sustainable lending-financing products and was one of the first banks in the country to launch sustainability-linked loans for corporate clients in 2020 with an allocation of RM3 billion through 2024.
Dato Abdul Rahman Ahmad, Group CEO of CIMB Group, says “We are pleased to have successfully executed this landmark SLD transaction, a testament to the expertise of our Treasury & Markets team and our Group’s ambition to be an ASEAN sustainability leader by 2024.
“This transaction demonstrates our very real commitment towards achieving our commitments to mobilize RM30 billion in sustainable finance by 2024, achieve net-zero scope 1 and 2 GHG emissions by 2030, and Net Zero GHG emissions by 2050, including financed emissions.
“In collaboration with our clients and partners, we look forward to introducing more innovative offerings such as this SLD in the sustainable finance space”
