Bank Islam Malaysia Berhad (BIMB) has reported an improvement in its Environmental, Social and Governance (ESG) score, which now stands at 57 out of 100. This represents significant progress from the previous score of 43, reflecting advancements in BIMB’s sustainability efforts.
As BIMB embarks on an enhanced sustainability journey, Maybank Investment Bank Bhd (Maybank IB) has maintained a HOLD rating on the bank, with a target price of RM2.75. This valuation is based on a projected financial year 2025 (FY25) price-to-book value ratio of 0.8 times and a forecasted return on equity of 7.9%.
BIMB’s ESG score, now above the average rating of 50 on Maybank IB’s scale, reflects the bank’s expanded ESG initiatives. Key developments include the establishment of an ESG credit risk guideline and the collection of data on Scope 1 and 2 emissions to monitor and set reduction targets.
The bank has also initiated the collation of Scope 3 emissions from corporate clients and is developing a climate transition plan as part of its broader sustainability policy. BIMB’s target is to double its ESG-rated financing assets by 2025 while creating tangible social impacts such as benefitting 3,000 individuals through social finance initiatives. Furthermore, the bank aims to elevate its employee engagement and readiness to match national benchmarks for the best workplace environments.
Financially, BIMB’s management has set ambitious goals for FY24. These targets include 7%-8% financing growth, a net interest margin above 2.1% and a gross impaired financing ratio under 1.1%. In the first half of FY24, BIMB achieved 2.4% financing growth, a gross impaired financing ratio of 0.92% and a credit cost of 23 basis points. The bank is also focused on technology investments and workforce development, aiming to bring its cost-to-income ratio down to 55% over the next three years from its current 63.1%.
