RHB Research has maintained a “Buy” recommendation for CIMB Group Holdings Bhd with a target price of RM6.40 from RM6.30, 12% upside.
“Management remains vigilant on asset quality despite a loan book clean-up. Valuation is compelling at 0.9x P/BV despite the 32% rise in share price over the past 12 months,” it said
The research house said that CIMB expects a gradual recovery in key operating markets to underpin improved financial performances in 2022.
RHB said that management is targeting loan growth of 5-6% with NIM expected to be stable to -10bps with margin pressures coming mainly from Indonesia and Singapore.
While fee income growth is expected to be good, RHB said that the income from trading and investments will be impacted by market volatility and tough trading conditions.
RHB said that the credit cost is expected to stay elevated at 60-70bps (FY21: 73bps), driven by non-retail exposures across markets. Management flagged the possibility of further provisions for the double-crediting of accounts in 1Q22.
