CIMB likely to fall short of its 10% loan growth target this year

Loan growth in 1Q16 was a mere 5.6%.

Management’s loan growth target of 10% for the group this year still appears stretched, according to Maybank Kim Eng. In 1Q16, loan growth was 5.6% YoY excluding the forex impact. On a QoQ basis, gross loans had in fact contracted 2.8%.

While 2Q has seen loan growth improve, the pace remains moderate across the region and is likely to fall short of the group’s target for the year.

"In Indonesia, the target had been to grow loans by 7-8% this year, but the pace thus far has been slower than expected i.e. in the mid-single digit range. The push is to drive retail lending and lending to corporates has been quiet. Loan growth in Singapore is tracking in the low single digits," said Maybank Kim Eng.