BPMN3023 STRATEGIC MANAGEMENT

FIRST SEMESTER SESSION 2019/2020 (A191)

GROUP F

GROUP PROJECT: CIMB GROUP HOLDINGS BHD

Submitted to:
Dzulhilmi Bin Ahmad Fawzi

Prepared by:
INFINIDEA

NO NAME MATRIC NO

1. LENG CHI YIN 244431

2. WONG GHI KANG 244489

3. TAN MIN HWA 245007

4. NGO JIA XIN 245093

5. LU JENG YAN 246005

TABLE OF CONTENT

1.0 Identify Strategic Issues / Problems ……………………………………………….…....…1

2.0 Analyse Company ……………………………………………………………………….….3
2.1 External Force ………………………………………………………………………….….3
2.1.1 Analyse Environmental Factors …………………………………………………....….3
2.1.2 5 forces By Michael Porter ……………………………………………………….......10
2.2 Internal Force ……………………………………………………………………….…….12
2.2.1 Company Name ………………………………………………………………………12
2.2.2 Company’s Type and Industry ……………………………………………………….12
2.2.3 Vision, Mission, Values and Strategies …………………...……………………….…13
2.2.4 The List BOD …………………………………………………………...…………....15
2.2.5 The List of Top Management Team …………………………………….…………....24
2.2.6 Organisational Structure ………………………………………....…………………...26
2.2.7 Financial Analysis ……………………………………………………...…………….27
2.2.8 Functional Aspects …………………………………………………………………...36
3.0 Strategy / Strategic Options / Recommendations …………………………………….….40
3.1 SWOT Analysis ……………………………………………………………………….….40
3.1.1 Strengths ……………………………………………………………………………...40
3.1.2 Weaknesses …………………………………………………………………………...40
3.1.3 Opportunities …………………………………...…………………………………….41
3.1.4 Threats …………………………………………………………………………….….41
3.2 TOWS Matrix Analysis ……………………………………………………………….….42
3.2.1 Strengths and Opportunities Strategies …………….….………………….…....…….44
3.2.2 Strengths and Threats Strategies …………………………………………...………...45
3.2.3 Weaknesses and Opportunities Strategies ……………………………………………46
3.2.4 Weaknesses and Threats Strategies ……………………………………………...…...48
4.0 References ……………………………………………………………………………….….49
1.0 IDENTIFY STRATEGIC ISSUES/PROBLEMS

CIMB Group Holdings Bhd is a leading Kuala Lumpur, Malaysia headquartered ASEAN
universal bank, which is one of the largest investment banks in Asia. This group operates under
some entities, which include CIMB Investment Bank, CIMB Bank, CIMB Islamic, CIMB Niaga,
CIMB Securities International and CIMB Thai. They offer consumer banking, wholesale
banking, commercial banking, Islamic banking, asset management and investment services.
CIMB Group also was the widest retail branches which core markets being Malaysia, Indonesia,
Singapore and Thailand. CIMB Group basically operate their business on a dual banking basis
through which are giving the customers a choice for both conventional and Islaic solutions. Later,
we will discuss about what issues or problems that faced by CIMB Group Holding Bhd. It was
about two issues that faced by them, competitors and the technical issues that currently facing by
CIMB Group.

The issue that faced by CIMB Group which is competitors. As one of the largest
commercial banks in Malaysia, they need to be more hard work to provide more quality and
various services to the customers. So, that can maintain the loyal or attract more prospective
customers. In additional, CIMB Group is also one of the top 10 banks in Asia. With these it was
giving the opportunity to compete with other existing international banks. For example, CIMB
Group’s competitors are Maybank, Public Bank and RHB Bank. As the day goes, there will be
more banks growing, stronger and increase the number of competitors for CIMB Group. As a
result of these existing competitors, it causes the CIMB Group itself to have a limited market
growth. It was because of provided the same services compared to other existing banks. So, there
is also the opportunity that the existing customers of CIMB Group may also turn back from
CIMB Group and choosing another competitor. CIMB Group needs to prove that they can stand
out with offers better service than other existing national and international banks. Aside from
that, the higher number of competitors makes it hard for CIMB to expand its market share.

The second issue that faced by CIMB Group is technical issue with card payment system.
On 4 Sept 2019, CIMB bank has announced that the CIMB Bank card’s users facing the payment
problems. CIMB Bank Berhad and CIMB Islamic Bank Berhad were clarified that they faced
some technical issues, which affected some systems especially for online credit card transactions.

1
It is because of CIMB faced a technical issue with its card payment system, Malaysia Airlines
customers are advised to make payment via CIMBclicks or other alternative payment methods
available. Previously, CIMB Bank faced problems with card payments, it was just a week after a
two-day outage of its online banking service. It will be affected the customers trust to CIMB
Group due to this technical system problems. This kind of problems will cause consumers to be
disappointed with CIMB Group. After that, CIMB Group had apologize about the technical
issues to all the customers and have mentioned about affecting online credit cards of CIMB Bank
and CIMB Islamic Bank transactions, have been resolved. They also assuring its core banking
system and customer data remains intact. But these all will also affect the image and confidence
to the existing and prospective customers to CIMB Group.

2
2.0 ANALYSE COMPANY
2.1 EXTERNAL FORCE
2.1.1 ANALYSE ENVIRONMENTAL FACTORS
PESTEL ANALYSIS

The external factor that we use to analyze CIMB Group is PESTEL ANALYSIS. Pestel analysis
consist of Political, Social. Economic, Technology, and Environmental. The analysis can
influence indirectly into the industry.

(a) Political

The Political impact is a factor that indirectly affect the performance of CIMB Group. The major
political impact comes from the government sector where the policy of the government affected
the industry where involved CIMB Group.

From the aspect of political:

(i) Corporate governance

Corporate governance is a system that has a board of directors that directed and
controlled to the companies. CIMB Group has set up an outline in compliance with the
Malaysian Code on Corporate Governance. This outline contains eight principles as
follows:

Principle 1 – Establish clear roles and responsibilities

Principle 2 – Strengthen composition

Principle 3 – Reinforce independence

Principle 4 – Foster commitment

Principle 5 – Uphold integrity in financial reporting

Principle 6 – Recognize and manage risks

3
 Principle 7 – Ensure timely and high-quality disclosure

Principle 8 – Strengthen relationship between company and

shareholders

Besides that, CIMB recognizes that is essential for good governance to have an effective Board.
By separating the roles of Chairmen and the group managing director, they can ensure the
balance of the authority, power and make sure the task or roles are separate to avoid any
conflicts. Thus, with the clear roles division, no individuals monopoly the decision process.

(ii) Large amount of shareholders

CIMB Group have at least 30 largest shareholders as the leading shareholder is

Khazanah Nasional Berhad which holds a total of 29.9% per share. This was followed
by Employee Provident Fund Board and Mitsubishi UFJ Financial Group which holds
a total of 12.92% and 5% respectively. Having a large number of shareholders whom
well known in the industry could help the CIMB Group in enhancing the new
relationship with the new organisation and stabilize the position in the industry. This is
because, as CIMB Group strengthening their relationship with another new
organisation could stronger their position in the industry and they could gain trust and
confidence from the outsider. Thus, this could help CIMB Group to access to the
opportunity of expanding their market in a country other than the ASEAN countries.
Moreover, CIMB Group can increase their reputation in the eyes of the other
organisations.

(iii) Bank Negara as the central bank

Bank Negara Malaysia (BNM) which is responsible to regulate the law and rules for
all the banking institution in Malaysia. Thus, CIMB Group is also tied into the rules
and regulations set by BNM. Besides that, BNM also responsible for setting the base
lending rate (BLR) which banks cannot exceed the range that have been setup.
Moreover, BNM also playing the role for promoting the monetary stability. For
example, all the banks in Malaysia including CIMB are controlled to implement the

4
 strategy to control their position during the fluctuation of the economy in the world
or in the country.

(b) TECHNOLOGY

The future transformation of Human Capital at CIMB Group will leverage on various
emerging digital technologies, which can revolutionise employee performance monitoring and
help achieve new levels of excellence and pragmatic value in learning and development.

(i) CIMB 3D (DIGITAL, DATA AND DISRUPTION) ACADEMY

The CIMB 3D is aspires to enhance the digital quotient in all job roles, enable
the Group’s digital transformation and build on agile, innovative and tech-savvy
workplace across all levels. Its competency framework is anchored on six pillars,
namely digital world awareness, agile & entrepreneurial thinking, future communication
skills, risk & governance, human centered design and data science & analytics. CIMB
Group is spending RM75 million on 3D academy programmes to deliver a total of 2
million training hours across the Group over the next three years for ready the future of
CIMB Group. In 2018. More than 14,000 participants attended the 3D Academy
programmes.

(ii) Enhanced Cloud-based HRIS

In aspiring to be a data-first organisation, we have been strategizing and

implementing a steady stream or digital transformation projects across the Group. One
of the key outcomes is to achieve an agile, innovative, tech-savvy workforce across the
board. In 2018, some of the achievements included:

1. Introducing a QR code system to promote simplicity and efficiency for

employees to access published information, surveys, learning assessments.

2. Promoting a mobile voting system for conferences, forums, training

programmes.

3. Leveraging on social media to promote employee engagement.

5
 4. Implementing mobile learning (learning-on-the-go) in Indonesia, Singapore
and Thailand.

5. Piloting HR Chatbot for on-boarding and a gamification application (ZAC

app)

(c) SOCIAL

Our social impact can be measured by our commitment to the welfare and well-being of our
employees as well as the communities where we serve. The following section outlines some of
the key policies, programmes and areas of impact in both the workplace and the community.

(i) Training for development and growth

At CIMB Group, they deployed hybrid learning methodologies towards

positive learning outcomes. From digital platforms to online courses, from
instructor-led sessions to computer-based workshops, training and development
for them is all about instilling confidence, tapping the innate propensity to
learn, and applying the knowledge at the workplace

(ii) Building the talent pipeline

The CIMB ASEAN scholarship is a fully funded undergraduate scholarship

that aims to invest in the next generation of talent and create a robust talent
pipeline for CIMB Group. It reaffirms our commitment to support our business
aspirations and growth. In addition to financial assistance, through a well-
structured mentoring and coaching programme, they are committed to
grooming their scholars to be career-ready and to become the next cadre of
leaders, who will champion future growth. The programme includes a buddy
and mentor support system, where our scholars are exposed to industry
practices and professionals for insights and greater learning.

6
 (d) ECONOMIC

The economic impact of CIMB Group Holding BHD is delivered by going beyond
business as usual processes, to create value for our customers, suppliers, regulators and the
government. For instance, one of our primary concerns and a priority area in relation to our
customers is to provide them a safe and secure digital environment, for them to access financial
knowledge as well as information on our quality financial products. We have therefore
institutionalized various data governance mechanisms for the monitoring and safeguarding of
personal information as well as the interests of our customers, while they enjoy interacting with
our digital solutions without the fear of cyber threats. We have also launched Lean Six Sigma
initiatives, with significant process and service improvements, promising a superior customer
journey across all CIMB touch points. We will continue to devise innovative ways to address the
concerns of customers, suppliers, regulators with uncompromising commitment to good
governance, and with product, service, and technology solutions. The following section presents
our value-added approaches to designing and promoting our quality financial products,
enhancing access to finance, and providing a safe and secure environment.

With the advent of digitalization, alternative banking channels have become the need of the hour,
especially for greater convenience of customers. Such channels are also instrumental in reaching
out to customers in sub-urban and rural areas with mobile and broadband penetration, offering
banking at their fingertips.

(i) CIMB PAY

CIMB Pay is our first mobile app to combine secure cashless payments with deals
and offers by parking their CIMB Mastercard, Visa credit cards, as well as debit cards
in their mobile phones. Payments can be made by tapping mobile phones on any
contactless terminal with Near Field Communication (NFC) technology. The app has
an in-built notification system that alerts customers of nearby contactless terminals as
well as flash deals. All card details are tokenized, and no information is stored on the
devices, to enhance security.

7
 (ii) REKENING PONSEL

In Indonesia, we continued to offer ‘Rekening Ponsel’ an innovative and practical

application which enables cash transfers to anyone in the country using a valid mobile
number as the account number. Besides transfer of money, Rekening Ponsel also allows
purchases at registered merchants as well as withdrawals and cash-in at all CIMB Niaga
channels and approximately 40,000 Indomart and Alfamart mini-markets. With such
unconventional product mechanisms, our objective is to improve access to finance
through simple solutions, without the administrative costs involved in opening a trad.

(iii) TOUCH ‘N GO

During the year under review, we collaborated with Touch ‘n Go, ‘The first
Micro-payment Wallet in Malaysia’, to penetrate the Malaysian micro-payment services
market via the introduction of CIMB ‘Get Cash’ micro financing to all existing Touch ‘n
Go customers, with a loan facility of up to RM100,000. In March 2017, Touch ‘n Go
launched the Customer Experience Centre (CEC), which has adopted the cashless self-
service automated retail concept via itself Service Kiosk (SSK), Café and Vending
Machines. This is in addition to the offline support offered through our strategically
located customer hub at Nu Sentral. Since its operation, we have seen traffic of more
than 4,000 customers on a monthly basis. Other services and facilities available at the
CEC include customer service ambassadors, Touch ‘n Go customized photo card
printing, after sales services and merchant on-boarding area. At CEC, the CIMB
cardholders are also able to access their ATM and CDM banking facilities at their
convenience.

(e) ENVIRONMENTAL

Our environmental impact is guided by our commitment to factor in climate related

financial risks and the potential financial impact of such risks to our business as well as our
stakeholders. We are currently in the process of assessing these risks and opportunities for
scenario planning and mitigation measures. Meanwhile, the following section outlines some of

8
the key initiatives undertaken to manage our operational impact as well as our pioneering
sustainable financing efforts. We are guided by our Group Credit Risk Policy, which stipulates
that companies with high exposure to environmental or social risks are subject to higher credit
approving authority or extra due diligence. In addition, our Energy Management Statement
articulates our purpose and objectives of minimizing our direct environmental impact from our
operations.

Managing environmental impact across all our operations is part of our concerted efforts
across the CIMB network. Our main environmental footprint consists of office materials and
energy usage. We have the processes in place to make continuous improvements in energy
efficiency, energy reduction and resource conservation. Our initiatives and processes for cost
optimization are documented under ‘Project Kaiju’. Going forward, our aspiration is to set more
ambitious targets and mobilize our workforce to positively contribute to our environmental
stewardship. We measure the success of our initiatives by the quantum of savings in terms of cost
and resources, besides the direct and indirect environmental impact.

The purpose of CIMB Group is to reduce energy consumption and eliminate waste
without adversely affecting business operations. Second is to optimize the use of energy and
adopt good energy management practices, to meet the energy efficiency practices established by
the Malaysian Energy Commission.

The objective of CIMB Group is adhere to best energy management practices set by the
Malaysian Energy Commission. Second is monitor energy usage regularly. Next is report
monthly energy usage. Fourth is identify and implement ways to increase employee awareness.
Last but not least ensure that new appliances, equipment and systems are energy-efficient and
cost-effective.

The CIMB Group energy management efforts such as reducing energy consumption in
our headquarter buildings, implementing energy efficient initiatives, installing a chilled water fan
coil unit for energy optimization in new areas and facilities subject to building conditions, and
replacing centralized air cool package units with split unit air conditioners based on building
operational requirements and conditions. In 2017, we noted a decrease in electricity

9
consumption, mainly due to various measures put in place to use energy more efficiently. Some
of the measures adopted across all our HQ buildings are as follows:

(i) Luminaries

Our company using energy-saving LED lights for sky signs, replacing halogen
bulbs with LED ones in the lobby area, replacing T8 and T5 fluorescent tubes into LED
types for energy efficiency and replacing fluorescent EXIT signs with LED ones.

(ii) Air conditioning

Our company revising chillers temperature set point for energy optimization,
optimizing energy efficient chillers’ operation, installing automated Start and Stop air
handling units (AHU), rationalizing chillers capacity requirements for daily operations
and reinstating air-conditioning efficiency performance.

2.1.2 5 FORCES BY MICHAEL PORTER

Porter’s five forces model which is an analysis tool that use to identify the intensity of
competition in an industry and its profitability. Hence, we analyze CIMB Group Holdings
Berhad’s competitiveness and their profitability by using this tool. The five forces identified are:

i) COMPETITIVE RIVALRY

The CIMB Group Holdings Berhad competitive rivalry is high. This is

because AMMB Holdings Berhad, DBS group holdings Ltd, Edaran Otomobil
Nasional Berhad are the top 3 competitors for CIMB Group Holdings. Their
presence leads to limit their market growth. (MBASkool)

ii) THREAT OF NEW ENTRANT

There are low threat of new entrant for CIMB Group Holdings Berhad as
CIMB Group Holdings Berhad have ability to adopting IT Technology such as
1Platform in order to overcome the threat of new entrants. This 1Platform will

10
improve the quality service for CIMB Group Holdings Berhad to higher level if
compared to competitors or new entrants in the market. (UK Essay, 2017)

iii) THREAT OF SUBSTITUTE PRODUCTS OR SERVICES

There is a low threat of substitute products or services. This is because

CIMB Group Holdings Berhad constantly maintaining all procedures and ensuring
that all services are the best quality if compared to substitute services in the
market. The customer will not have to adopt a different product or services if
CIMB Group maintain and keep improving themselves in order to maintain it at
high standards. This may result in CIMB Groups will keep maintaining the loyal
customers and customers will not find other products or services to replace the
CIMB Groups’ products or services. (UK Essay, 2017)

iv) BARGAINING POWER OF SUPPLIERS

There is low bargaining power of suppliers as CIMB groups will be

possessing a good working relationship to extend into the purchasing of many
different goods from suppliers. Due to the good working relationship, there will be
a chance for CIMB group to negotiate the price of products and services when
purchasing is made from the CIMB group to supplier. CIMB group must have a
good research and development department will help to ensure all products are
high quality which provided by supplier. (UK Essay, 2017)

v) BARGAINING POWER OF BUYERS

There is also low bargaining power of buyers for CIMB due to the fact that
they have the ability to identify closely the customers’ needs and keep them
satisfied with products or services provided by CIMB. For example, CIMB
provide adequate information demanded by customer when CIMB Group
Holdings Berhad have make some changes for their company. When there is
enough information provided by CIMB Groups will avoid customers to have the
feeling of pressure and uncertainty on the company to change. (UK Essay, 2017)

11
2.2 INTERNAL FORCE
2.2.1 COMPANY NAME
Based on the assignment requirement, we had assigned a company to analyses and give some
recommendations or strategies to solve the problems that faced by the company. The company
that was assigned is CIMB Group Holdings Bhd.

2.2.2 COMPANY’S TYPE AND INDUSTRY

CIMB Group Holdings Bhd is a leading Kuala Lumpur, Malaysia headquartered ASEAN
universal bank, which is one of the largest investment banks in Asia. In additional, CIMB Group
Holdings Bhd. which is the company that publicly traded government-linked company. It
engages in the provision of financial and banking industries. CIMB group operates under some
entities, which include CIMB Investment Bank, CIMB Bank, CIMB Islamic, CIMB Niaga,
CIMB Securities International and CIMB Thai. Other than that, CIMB group also is one of the
largest Islamic banks in the world. It is because they were the fifth largest banking group in
ASEAN, they have around 36,000 staff in 16 countries across ASEAN, Asia and others.

CIMB Group Holdings Bhd was operating through the following segments: Consumer
Banking; Commercial Banking; Wholesale Banking; Group Asset Management and Investments
(GAMI); and Group Funding, with its core markets being Malaysia, Indonesia, Singapore and
Thailand. For the CIMB Investment Bank, it provides the market-leading conventional and
Islamic financial advice for the banking solutions to the customers. They have structured and
implemented award winning deals which show their ability to innovate and help their customers
achieve the goals. CIMB also has a wide-ranging retail banking network that around 800
branches that serve more than 14.0 million customers. Except ASEAN, they also have a presence
in China, Hong Kong, India, Sri Lanka, Korea, the US and the UK.

12
 2.2.3 VISION, MISSION, VALUES AND STRATEGIES
VISION
The vision of CIMB Group Holdings Bhd is to be the leading ASEAN company.

MISSION
The mission of the CIMB Group Holdings Bhd is to provide Islamic universal banking services
as a high performing, institutionalised and integrated company located in ASEAN and key
markets beyond, and to champion the acceleration of ASEAN integration and the region’s links
to the rest of the world.

VALUES
The following are the values of the beliefs that guide their actions of CIMB Group Holdings Bhd
to pursue their vision.

● Customer-centric:

We exist to serve our customers and we sell products and services that our customers understand
and value.

● High performance:

We work hard and we work strategically for customers, staff and other stakeholders.

● Enabling People

We empower and align our people to innovate and deliver value in their workplace as well as for
the community they serve.

● Strength in Diversity

We have respect for different cultures, we value varied perspectives and we recognise diversity as
a source of strength.

● Integrity

13
We are honest, respectful and professional in everything we do because integrity is the founding
value of CIMB.

The strategy of the CIMB Group Holdings Bhd that stated at annual report on 2018 was
“Forward23”. “Forward23” is to accelerate growth and future-proof its business. Accelerating
Growth: “We have significantly invested in building our ASEAN network and presence and are
now well poised to accelerate and pursue growth across our markets.” Future Proofing: “We will
be enhancing existing capabilities and building new capabilities as a future competitive
advantage.” ( CIMB Group Annual Report 2018) So, this strategy can prove that it was fit with
the vision that stated by CIMB Group, which is to be the leading ASEAN company.

From this strategy “Forward23”, Eddy Azly Abidin, President & Chief Executive Officer of
Takaful Ikhlas General Berhad and Rafe Haneef, Chief Executive Officer of CIMB Islamic was
successful launched the strategic partnership. The strategic partnership which is strategic
bancatakaful partnership that provide the common takaful products and solving methods to
CIMB Islamic’s customers across retail, SMEs and commercial segments. With launched this
strategic partnership, Takaful IKHLAS will be the preferred general takaful provider to all CIMB
Islamic customers around the world. In addition, Takaful IKHLAS expanding its forthcoming
digital platform to push forward its products online. This digitalisation initiative is also well
aligned with one of the objectives, which under the current mid-term growth plan “Forward23”.
With this, it can provide the customers with cost-efficient and convenient access to more and
more of its products through its one-stop digital banking platform. These all can match with the
mission of the CIMB Group that provide Islamic universal banking services to acceleration of
ASEAN integration and the region’s links to the rest of the world.

To make sure the continued transformational growth of “Forward23”, CIMB Group strong
commitment towards value creation for its stakeholders, CIMB’s new vision statement. It was
advancing customers and society, aims to sharpen its focus on customers, innovation and
sustainable practices. These all were stated at the annual report of CIMB Group. These all match
with the values such as customer-centric, high performance, enabling people, strength in
diversity and integrity. These all that mentioned which can help guide the CIMB Group toward
achieving the vision of the CIMB Group.

14
 2.2.4 THE LIST BOD

CIMB GROUP HOLDING BERHAD stands from eleven (11) members on the Board of
Directors for the latest year of 2018.

CIMB GROUP HOLDING BERHAD continues to be led by an experienced, competent and

diversified Board that is made up of Directors with appropriate competencies, knowledge, skills
and experience from diverse sectors and backgrounds and also in the Group’s core businesses.
Below are the summary table of the list of BOD of CIMB GROUP HOLDING BERHAD:

BOARD OF DIRECTORS DATE OF QUALIFICATIONS

APPOINTMENT

Datuk Mohd Nasir Ahmad 20 July 2015 • Fellow of the Associate of

Chartered Certified
Chairperson/Independent Accountants (ACCA)
Director United Kingdom

• Chartered Accountant,
Malaysian Institute of
Accountants (MIA)

• Masters in Business
Administration (Finance),
Universiti Kebangsaan
Malaysia

15
Datuk Mohd Nasir Ahmad was appointed as Chairman/Independent Director of CIMB
Group Holdings Berhad on 20 October 2018. He was re-designated as Member of Audit
Committee of CIMB Group Holdings Berhad on 20 October 2018. He was the President
of MIA from August 2011 to July 2013. He was elected as a Council Member of the
ACCA UK in September 2013 and was re-elected in September 2016.

He brings with him vast experience in the areas of finance, accounting and management
which spans over 39 years. Datuk Mohd Nasir also holds directorships in private
companies such as ProKhas Sdn Bhd and CIMB EOP Management Sdn Bhd.

Tengku Dato’ Sri Zafrul 27 February 2015 • Fellow, Asian Institute of

Tengku Abdul Aziz Chartered Bankers

Group Chief Executive

Officer/ Executive Director
• Master of Arts in Finance
and Management,
University of Exeter, United
Kingdom

• Investment Management
Certificate, Institute of
Investment and Research,
United Kingdom

• Bachelor of Science
(Hons) in Economics and
Accounting from the
University of Bristol,
United Kingdom

16
Tengku Dato’ Sri Zafrul Tengku Abdul Aziz is the Group Chief Executive
Officer/Executive Director of CIMB Group Holdings Berhad, a leading ASEAN universal
bank and a world leader in Islamic finance with a presence in 16 countries worldwide. He
is also the Chief Executive Officer/Executive Director of CIMB Bank Berhad and
President Commissioner of PT Bank CIMB Niaga Tbk.

Zafrul is currently a member of the APEC Business Advisory Council (ABAC),

representing Malaysia in promoting intra-trade and collaboration within Asia Pacific.
Further, as an advocate of Malaysia’s socio-economic development, he currently sits on
the Board of the National Sports Council of Malaysia, in addition to being a Trustee of
the Perdana Leadership Foundation and a member of the National Higher Education
Entrepreneurship Council under the Ministry of Education. He is also an Honorary
Commander of the Navy Volunteer Reserve under the Royal Malaysian Navy.

Teoh Su Yin 8 October 2014 • Bachelor of Arts (Hons) in

Business Studies, Sheffield
Senior Independent Director Hallam University, United
Kingdom

• Business and Technology

Education (BTEC) Higher
National Diploma (HND)
Business Studies, Sheffield
Hallam University, United
Kingdom

• Diploma in Professional
Marketing, Chartered
Institute of Marketing,
United Kingdom

• Licensed Investment
Adviser by Securities

17
 Commission of Malaysia

Teoh Su Yin was re-designated as Senior Independent Director of CIMB Group Holdings
Berhad on 20 October 2018. She has almost 20 years’ experience in equity research and
investments.

She currently serves on the Board of Albizia ASEAN Opportunities Fund in Singapore,
the Board of World Wildlife Fund-Malaysia and holds directorships in various other
private companies.

Robert Neil Coombe 16 April 2014 • Bachelor of Laws (LLB),

University of Technology,
Independent Director Sydney, Australia

Robert Neil Coombe was appointed as Chairperson of Board Risk and Compliance
Committee on 23 January 2019 and a member of Group Nomination and Remuneration
Committee on 24 January 2019. He is also CIMB’s Sustainability Sponsor to champion
the Group’s sustainability efforts. He is currently the Executive Chairman of the ASX
listed Generation Development Group, a financial services business focused on
generational financial solutions. He is also Chairman of Craveable Brands, the largest
Australian owned Quick Service Restaurant business. He was the CEO of Craveable
Brands between 2013 and April 2017.

In total, he has over 35 years’ corporate experience in both Australia and Asia. In addition
to the above, Robert is a Director of Tibra Capital, Surfing Australia and the Australian
Indigenous Education Foundation. He is also a member of the Advisory Board of 5V
Capital Investors.

Dato' Mohamed Ross Mohd 19 April 2016 • Banking Diploma (Part 1),
Din Institute of Bankers, United
Kingdom

18
Independent Director

Dato' Mohamed Ross Mohd Din was re-designated as Chairperson of the Audit
Committee of CIMB Group Holdings Berhad on 20 October 2018.

Dato' Mohamed Ross currently sits on an Advisory Board overseeing a Private Equity
Fund (Ekuinas OFM Programme) as an Independent Member. Additionally, he also sits as
a Trustee on the Board of Lembaga Zakat Selangor and also serves as an Independent
Director on the Board of an Asset Management company.

Dato' Lee Kok Kwan 20 July 2015 • Masters in Business

Administration, Simon
Non-Independent Director Fraser University, Canada

• Bachelor of Business
Administration (First
Class), Simon Fraser
University, Canada

Dato’ Lee Kok Kwan was the Deputy Chief Executive Officer (CEO) of CIMB Group
prior to his Board appointments. His areas of responsibilities include Corporate Banking,
Transaction Banking and Sales and Trading businesses in interest rates, credit, foreign
exchange, bonds, equity, commodities and their derivatives, treasury and funding for the
Group, fixed income investments and debt capital markets which he developed since
joining CIMB in 1996, and has since grown the business to be one of the largest global
markets operations in ASEAN.

Dato’ Lee is also the President of the Financial Markets Association and Adviser to the
Securities Commission Malaysia. He was appointed as First Director and Chairman of the
Bond and Sukuk Information Platform Sdn Bhd with effect from 3 November 2017 and
22 November 2017, respectively. He also holds directorships in various other private
companies.

Ahmad Zulqarnain Che On 3 November 2017 • Bachelor of Arts in

19
Non-Independent Director Economics from Harvard
and Radcliffe College,
Harvard University, USA

Ahmad Zulqarnain Che On is Deputy Managing Director of Khazanah Nasional Berhad.

He joined Khazanah in May 2014 as an Executive Director, Investments and subsequently
appointed as Head, Strategic Business Unit of Khazanah.

Prior to Khazanah, he was appointed as the first Managing Director/Chief Executive

Officer of Danajamin Nasional Berhad in 2009. He has over 22 years’ experience in both
banking and corporates, including tenures with UBS Warburg, Pengurusan Danaharta
Berhad, CIMB Group and Symphony Group.

Afzal Bin Abdul Rahim 31 January 2019 • Bachelor Degree in

Mechanical Engineering
Independent Director with Electronics, University
of Sussex at Brighton,
United Kingdom

Afzal Abdul Rahim, was appointed as an Independent Director of CIMB Group Holdings
Berhad on 31 January 2019. He had also been appointed as a Member of the Group
Nomination and Remuneration Committee of CIMB Group Holdings Berhad and Chairs
the CIMB Technology Strategic Panel. He previously served as an Independent Director
of CIMB Bank Berhad from 29 June 2016 until 31 January 2019.

Afzal is a technology entrepreneur who currently serves as Commander-In-Chief of

TIME dotCom Berhad, an ASEAN based telecoms operator encompassing Fixed Line,
Data Centres and Global Submarine Cable Systems. He joined TIME in 2008 after
establishing The AIMS Asia Group and Global Transit International in 2006.

20
Didi Syafruddin Yahya 7 May 2019 • Fellow Chartered
Accountant, Institute of
Independent Director Chartered Accountants in
England and Wales

• Masters of Arts,
University of Cambridge

AREAS OF EXPERTISE

• Accounting, Audit,
Banking and Finance

Didi Syafruddin currently also sits on the Board of CIMB Investment Bank Berhad as an
Independent Non-Executive Director. He previously worked for J.P. Morgan for more
than 20 years based in Indonesia and subsequently Malaysia where he was the Managing
Director and Head of Investment Banking. At J.P. Morgan, Didi Syafruddin advised
clients on mergers and acquisitions, equity and debt capital markets transactions and had
been involved in a number of landmark deals in both Indonesia and Malaysia.

Didi Syafruddin is a Fellow of the Institute of Chartered Accountants in England and

Wales (FCA) and Economics graduate from the University of Cambridge.

Tongurai Limpiti 7 May 2019 • MBA (Account and

Finance), University of
Independent Director Wisconsin, Madison

• B.A. in Accountancy,
Chulalongkorn University

21
Mrs. Limpiti is currently Chairman of Bangkok Commercial Asset Management Plc., and
currently sits as Director of Thai Credit Guarantee Corporation and Thai Investors
Association. She is also Honorable Director (Economics, Investment and Finance) for
Technology and Innovation-Based Enterprise Development Fund (TED Fund) and an
advisor to Electronic Transactions Development Agency, a public organisation.

She graduated with a B.A. in Accountancy from Chulalongkorn University and MBA
(Account and Finance) from the University of Wisconsin, Madison, USA. Mrs. Limpiti
had served as Deputy Governor of Financial Institutions Stability at The Bank of Thailand
from 2014 until her retirement in 2016.

Datin Rossaya Mohd Nashir 2002 • Bachelor of Laws

(majoring in Business Law),
Group Company Secretary Coventry University, United
Kingdom

• Licensed Secretary,
Companies Commission of
Malaysia

• Affiliate, Malaysian
Institute of Chartered
Secretaries and
Administrators

Datin Rossaya serves as a member of the Companies Commission of Malaysia’s

Corporate Practice Consultative Forum and is a Director of several subsidiaries in CIMB
group. She is a CIMB Sustainability Champion and has initiated several projects to
encourage sustainability in the workplace for #teamcimb. She actively advocates greater
participation of women in the boardroom and has been involved in various networking
initiatives to promote this agenda.

2.2.5 THE LIST OF TOP MANAGEMENT TEAM

22
No. Name Position

1. Tengku Dato’ Sri Zafrul Tengku Abdul Group Chief Executive Officer,
Aziz
Country Head, Malaysia,

Chief Executive Officer/Executive

Director, CIMB Bank Berhad

2. Shahnaz Jammal Chief Executive Officer, Group

Wholesale Banking

3. Samir Gupta Chief Executive Officer, Group

Consumer Banking

4. Effendy Shahul Hamid Chief Executive Officer, Group

Ventures & Partnerships

5. Mohamed Rafe Mohamed Haneef Chief Executive Officer, Group

Islamic Banking,

Chief Executive Officer/Executive

Director, CIMB Islamic Bank Berhad

6. Victor Lee Meng Teck Chief Executive Officer, Group

Transaction Banking

Chief Executive Officer, Group

Commercial Banking

7. Omar Siddiq Amin Noer Rashid Group Chief Operating Officer

8. Tigor M. Siahaan Country Head, Indonesia

President Director & Chief Executive

Officer, PT Bank CIMB Niaga Tbk

23
9. Mak Lye Mun Country Head Singapore

Chief Executive Officer, CIMB Bank

Singapore

10. Dato' Hamidah Naziadin Group Chief People Officer

Chief Executive Officer, CIMB

Foundation

11. Gurdip Singh Sidhu Group Chief Strategy & Design

Officer

12. David Richard Thomas Group Chief Risk Officer

13. Kwan Keen Yew Group Chief Legal & Compliance

Officer

14. Khairul Rifaie Group Chief Financial Officer

15. Amran Mohamad Group Chief Internal Auditor

16. Datin Rossaya Mohd Nashir Group Company Secretary

24
 2.2.6 ORGANISATIONAL STRUCTURE

Figure 1 : CIMB Group Organisation Structure

Based on the annual report, CIMB Group has an organisational structure that is aligned with its
business and operational requirements, with clearly defined lines of responsibility and authority
levels. CIMB Group is implementing the matrix structure which a blend of the functional
organizational structure and projected organizational structure.

CIMB Group organisation structure buildup of two main parts which are the business unit and
business enablers. Under business unit consist of six parts which are the group wholesale
banking, group consumer banking, group commercial banking, group transaction banking, group
Islamic banking and group ventures and partnerships. While business enablers consist of three
parts which are the group strategy and design, group human resource and group chief operating
officer.

25
Under the group chief operating officer department consists of four parts: group finance, group
technology, group operations and group corporate services.

2.2.7 FINANCIAL ANALYSIS

(a) Profitability Ratio

Profitability ratios are used to increase the business’s performance by generating the earnings by
used the information or data in the financial statement from a specific point in time. This ratio
can show that the company is in profit situation or in a loss situation. Profitability ratios also
show how well companies use their existing assets to generate profit and value for shareholders’
equity. Besides that, ratios also provide much more information when compared to results from
other, similar companies, the company’s performance or the industry average.

(i) Return on assets (ROA)

Return on assets (ROA) is a financial ratio that shows the percentage of profit of a company that
earned in relation to its company’s overall resources. ROA can be defined as net income divided
by total assets. Net income is derived from the income statement of the company and is the profit
that deduced after taxes. The assets are derived from the balance sheet and include all the cash
and cash equivalent items such as inventories, land, vehicle, account receivable and the capital
equipment (Albrecht, 2005). Here is the formula for the ROA:

Profit after Taxes

Return on assets (ROA) =
Total Assets

Year 2016 2017 2018

Profit after Taxes (RM’000) 3,632,957 4,607,966 5,663,353

Total Assets (RM’000) 485,766,887 506,499,532 534,089,043

26
Return on Assets (ROA) 0.007479 0.009098 0.01060

Figure 2: Return on Assets of CIMB Group for three years.

Based on figure 1, the year 2018 has the higher ROA among the three years which is 0.01060.
this can be mean that every RM1 that CIMB Group invested in assets during the year produced
RM0.01 of profit after tax. ROA of CIMB Group has been increased year by year which mean
that in year 2016 is 0.007479 increased to 0.009098 in the next year and at year 2018 had jumped
to 0.01060. This showed that CIMB Group are better at converting its investment into profits.
The lowest ROA of CIMB Group is 0.007479 in the year 2016 among the three years. According
to the graph, we can see that there was improvement in CIMB Group in all the investment
because every investment that made by CIMB Group had gained back the highest profit.

(ii) Return on Equity

Return on equity (ROE) is a ratio that provides investors with insight into how efficiently a
company or the management team of the company in handling the money that shareholders have
contributed to it. This can be mean that ROE is to measure the profitability of a corporation in
relation to stockholders’ equity. The higher the ratio of ROE, the more efficient a company’s
management in generating income and growth of the company from its equity financing. Here is
the formula for ROE:

Net Income
Return on equity (ROE) =
Total Shareholders ’ Equity

27
Year 2016 2017 2018

Net Income 9,825,926 10,459,097 9,634,440

(RM’000)

Shareholder Equity 21,796,234 22,922,463 25,026,678

(RM’000)

Return on 0.4508 0.4563 0.3850

Equity(ROE)

Figure 3: Return on equity of CIMB Group among three years.

Based on figure 2, the highest of ROE is in year 2017 which is 0.4563. It indicates that CIMB
Group is a growing company for the past 12 months in the year 2017. On the other hand, CIMB
Group earnings per ringgit of common stock in 2017 were approximately RM0.04 in year 2017.
The shareholders’ return on investment is 4%. Next, ROE of CIMB Group has the unstable float
among the three years. In the year 2016, the ROE of CIMB Group is 0.4508 then increased to
0.45663 in year 2017, but in year 2018 had decreased to 0.3850, which could indicate CIMB
Group more successful generate cash in the first two years but had some drop of performance in
year 2018 due to the unstable world’s economic status at the respective year.

(b) Liquidity Ratio

28
The liquidity ratio is an important financial indicator used to determine the debtor's ability to
repay the current debt without increasing external capital. The liquidity ratio determines the
company's ability to withstand short-term debt and cash flow, while the solvency ratio focuses on
the ability to pay long-term debt (Kenton, 2019).

(i) Current Ratio

The current ratio is an indicator of the company's ability to pay short-term debt or the liquidity
ratio that expires within one year. It tells investors and analysts how to maximize their current
assets on their balance sheets to meet their current debt and other payables. A current ratio below
the industry average may indicate a higher risk of distress or default. Similarly, if the company’s
current ratio is very high compared to its peers, it means that management may not be able to
effectively use its assets. (Kenton, 2019). Here is the formula for the current ratio:

Current Asset
Current Ratio =
Current Liability

Year 2016 2017 2018

Current Asset (RM’000) 787,919 899,319 545,817

Current Liability (RM’000) 1,717,420 1,600,878 1,475,519

Current Ratio 0.4646 0.5618 0.3699

29
 Figure 4: Current Ratio of CIMB Group among three years.

CIMB group main source of funding include consumer banking, corporate banking, investment
banking, Islamic banking, asset management, insurance and takaful. Based on figure 3, the year
2017 has the highest current ratio which is 0.5618. Next, the current ratio of CIMB Group has
been increased from the year 2016 to 2017 which the ratio jumping from 0.4646 to 0.5618. But
the current ratio of the CIMB Group decreased from year 2017 to 2018 which is from 0.5618 to
0.3699. The lowest current ratio of CIMB Group is 0.3699 in the year 2018 among the three
years.

(c) Leverage Ratio

Leverage ratio is used to measure the level of the debt that obtained by a company. A company
can provide capital or funds to its asset either with equity or debt. If a company chooses to
finance through debt will give big impact to company involves risk. This is because debt coerce
company to pay interest and to repay the principal as promised. However, equity financing does
not obligate the company to pay anything. This is due to dividends are paid at the discretion of
the board of directors. The extent that debt financing is used relative to equity is financial risk.

Financial leverage ratio is used to measure the company has taken on how much financial risk.
This ratio has 2 types which are component percentages and coverage ratios. The component
percentages are calculate or compare a company’s debt with its equity capital. Coverage ratio
reflects a company’s competency to respond fixed obligations such as interest, principal
repayment or lease payments. (Drake)

(i) Debt-to-equity Ratio

Debt-equity ratio is to make sure that there is a proper balance between the owned funds and the
borrowed funds. This ratio is to avoid out of proportion burden of long-term debt which affect
the company's profitability. (Spring, 2003) This ratio helps to measure the ability of shareholders'
equity to take over all undischarged debt when the business declines. A high ratio indicates that
the business owners having difficulties in providing sufficient equity to fund a business. Here is the
formula for the debt-to-equity ratio:

30
 Total Liabilities
Debt-to-equity Ratio =
Total Shareholders ’ Equity

Year 2016 2017 2018

Total Liabilities (RM’000) 438,687,729 456,693,097 481,501,072

Total Shareholders’ Equity 47,079,158 49,806,435 52,587,971

(RM’000)

Debt-to-Equity Ratio 9.3181 9.1694 9.1561

Figure 5: Debt-to-Equity Ratio of CIMB Group among three years.

Based on figure 5, the year 2016 has the highest debt-to-equity ratio which is 9.3181. It shows
that CIMB Group has higher debt-to-equity ratio which indicates higher risk. Next, the debt-to-
equity ratio of CIMB Group has been decreased from the year 2016 to 2017 which the ratio
dropping from 9.3181 to 9.1694 with 1.6%. The debt-to equity ratio of CIMB Group continue
dropping from the year 2017 to 2018 which the ratio from 9.1694 to 9.1561 with 0.15%. It
indicates that CIMB Group has a small deal of debt with respect to its benefits seems the ratio
performance. The lowest debt-to-equity ratio of CIMB Group is 9.1561 in the year 2018 among
the three years.

31
 (ii) Debt-to-assets Ratio

The debt-asset ratio also called the debt ratio and it measures the relative proportions of debt and
equity funds used to finance the firm’s assets. Creditors prefer low debt-asset ratio due to more
equity funds are available to meet the firm’s financial obligations. (Spring, 2003) Investors must
assess whether the company can pay for the return on investment. The higher of debt-to-assets
ratio which indicate the higher the financial risk. It shows that the higher the degree of leverage
(DoL). Here is the formula for the debt-to-assets ratio:

Total Liabilities
Debt-to-assets Ratio =
Total Assets

Year 2016 2017 2018

Total Liabilities (RM’000) 438,687,729 456,693,097 481,501,072

Total Assets (RM’000) 485,766,887 506,499,532 534,089,043

Debt-to-Assets Ratio 0.9051 0.9017 0.9015

Figure 6: Debt-to-Assets Ratio of CIMB Group among three years.

32
Based on figure 6, the year 2016 has the highest debt-to assets ratio which is 0.9051. A ratio
below 1 translates into a fact that a larger portion of the company's assets are financed by equity.
In other words, the company has more assets than liabilities. Next, the debt-to-assets ratio of
CIMB Group has been decreased from the year 2016 to 2017 which the ratio dropping from
0.9051 to 0.9017 with 0.38%. It indicates that CIMB Group could pay off its obligations by
selling its assets if it needed to. But the debt-to-assets ratio of CIMB Group continue dropping
from the year 2017 to 2018 which the ratio dropping from 0.9017 to 0.9015 with 0.02%. So, the
lowest debt-to-assets ratio of CIMB Group is 0.9015 in the year 2018 among the three years.

(d) Other Financial Performance Analysis

(i) Dividend Payout Ratio

The dividend payout ratio indicates the percentage of after-tax profits paid out as a dividend. The
amount unpaid to shareholders is retained by the company to repay debt or reinvest in the core
business. The dividend payout ratio shows how much money the company returns to the
shareholders, and how much money continues to reinvest in growth, repay debt or increase cash
reserves. Since investors want to see a steady stream of sustainable dividends from the company,
the dividend payout ratio analysis is very important. A consistent trend for this ratio is usually
more important than a high or low ratio. Here is the formula for the dividend payout ratio:

Dividend Per Share

Dividend Payout Ratio =
Earning Per Share

Year 2016 2017 2018

Dividend per share (sen) 20 25 25

Earnings per share (sen) 41 49.6 59.7

Dividend Payout Ratio 0.4878 0.5040 0.4188

33
 Figure 7: Dividend Payout Ratio of CIMB Bank among three years.

Based on figure 6, the year 2017 has the highest dividend payout ratio which is 0.5040. This
indicates that CIMB Bank is paying 50% of its earnings per share to its shareholders. According
to CIMB Bank debt level and operating expenses, this may be a sustainable interest rate as the
revenue seems to support a 50% ratio. Next, the dividend payout ratio of CIMB Bank has been
increased from year 2016 to 2017 which the ratio growing from 0.4878 to 0.5040 with 0.01%.
But the dividend payout ratio of CIMB Bank decreased from year 2017 to 2018 which the ratio
dropping from 0.5040 to 0.4188 with 0.08%. So, the lowest dividend payout ratio of CIMB Bank
is 0.4188 in year 2018 among the three years.

34
 2.2.8 FUNCTIONAL ASPECTS

Figure 8: CIMB Group Organisation Structure

(a) Group Wholesale Banking

The functional aspect for the Group wholesale banking divided into two divisions which are
Investment Banking and Corporate Banking, Treasury & Markets.
Investment Banking includes Corporate Client Solutions, which are covering the bank's
institutional and corporate clients and Sector Specialists in real estate and agribusiness; the
Advisory business unit which consists of Corporate Finance and Project Advisory; the Group
Equities business unit comprising Equity Capital Markets (ECM), Institutional Sales, Research,
Retail Equities, Futures Broking and Securities Services; and the Group Asset Management
business unit.
For the Corporate Banking, Treasury and Markets which is responsible for corporate banking;
transaction banking; the group's markets, sales and trading businesses in interest rates, credit,
foreign exchange, commodities, equities and their derivatives; debt capital markets; fixed income
investments; and treasury and funding operations for the group.

35
 (b) Group Consumer Banking
CIMB Group has perfect consumer banking services across its main operating markets in
Malaysia, Indonesia, Singapore, Thailand, Cambodia and the Philippines. The divisions which
include Consumer Banking are:
● Consumer Sales and Distribution which is responsible the sales network including
branches and mobile sales teams
● Retail Financial Services responsible for most of the retail banking and enterprise
banking products
● Commercial Banking which is responsible for SME and medium size companies
● Group Cards and Personal Financing responsible for credit cards businesses and personal
loans portfolio

(c) Group Commercial Banking

CIMB Group offer for the SMEs and medium sized corporates throughout ASEAN a
complete suite of both conventional and Islamic banking products and services. The
financial solutions are suited to meet the customer’s needs and cover core banking credit
facilities, such as term loans, working capital, trade finance and foreign exchange
facilities; and deposit products, such as current accounts, savings accounts and fixed
deposit accounts. In addition, CIMB Group also help their customers to expand their
businesses across ASEAN through their regional presence.

(d) Group Transaction Banking

CIMB Group offers a whole range of conventional and Shariah-compliant transaction
banking products covering trade finance and cash management. CIMB Group also try to
fulfill the transactional requirements of customers from small and medium enterprises to
large multinational corporations. For the global sales unit facilitates payments via foreign
exchange remittances and wholesale supply of banknotes. They also help clients bushes
their risks using instruments like forex options and derivatives contracts over interest
rates and commodities. They also provide a range of money market deposits and fixed
income and structured investments so that the customers can get the best return on their
capital and cash flow, according to the needs of the business.

36
(e) Group Islamic Banking
CIMB Islamic Banking is the global Islamic banking and finance business of the CIMB
Group. It provides a fully Shariah-compliant financial solution and operates concurrently
with the group's universal banking business. It provides Shariah-compliant financial
solutions in investment banking, consumer banking, asset management, takaful, private
banking and wealth management.

CIMB Group Islamic also offers a wide range of products and services to commercial,
corporate and institutional clients in ASEAN, the Middle East, South Asia, North Asia
and major international financial centers. Under the guidance of the CIMB Islamic
Shariah Committee, it manages its products and operations in strict accordance with
Shariah principles. The committee is made up of the world's leading Islamic scholars.

(f) Group Venture & Partnership

CIMB Group Venture and Partnership focuses on a variety of digital partnerships and
ecosystems. Its role involves finding strategic opportunities to jointly own and develop
platform-based businesses outside the bank. CIMB Group Venture and Partnership's
responsibilities include partner assessments, strategic planning, execution and operations
of the CIMB Group's business.

(g) Group Strategy & Design

CIMB Group Strategy and Design consists of Group Strategy, Private Equity and
Strategic Investments. The department is responsible for taking banking initiatives in
major regional markets. The establishment of CIMB Private Equity is to bring the
Group's financial expertise, experience and network to the private equity investment
arena. It provides equity capital for mature companies seeking to expand capital in most
industries to restructure and acquire capital.

CIMB Private Equity invests directly in the company through equity or quasi-equity
investments and establishes strategic alliances by investing in other private equity funds,

37
 with a focus on medium and long-term investments. With its proven local network and
expertise, it can assist foreign investors and international companies to get Malaysian
investment opportunities. In addition, a strategic alliance between CIMB Private Equity
and Navis Capital Partners provides an opportunity to enter other markets in the region.

(h) Group Human Resource

The Human Resources Department of CIMB Group manages CIMB's Human Resources
Policy and Procedures (HRPP), which manages all aspects of CIMB's human resources
management. The HRPP will conduct regular reviews to ensure that relevant controls are
in place to manage operational risks. Human Resources Department provides employees
with up-to-date information on policies and procedure changes via email or memo.

Group's Human Resources Department take continuous steps to improve the technical and
personnel management skills of middle managers and their networking capabilities. These
include structured development programs such as Accelerated Universal Banker (AUB),
Essential Universal Banker (EUB) and The Complete Manager (TCM), and regional team
building programs such as the Explorer’s Expedition and Navigator's Expedition.

38
3.0 STRATEGY/ STRATEGIC OPTIONS/ RECOMMENDATIONS
3.1 SWOT ANALYSIS
3.1.1 STRENGTHS
1. CIMB Group have the strong customers based to ensure that the business of the
group will operate continuously. Besides that, customer's loyalty and trust toward
CIMB Group can prove by the strong customer based.
2. The large number of employees in CIMB Group will ensure that the operation in
CIMB Group is smooth and effective. There are over 40,000 employees that
contribute in CIMB Group.
3. CIMB Group expand market in the industry. CIMB Group has several types of
businesses in the market, such as CIMB Bank, CIMB Investment Bank, CIMB
Islamic Bank and etc.

3.1.2 WEAKNESSES
1. There has competition from international banks make CIMB Group have limited
market growth. The competitors provided more advanced services and benefits
make CIMB Group difficult to growth.
2. CIMB Group presence restricted to Southeast Asian nations, such as Singapore,
Malaysia and Indonesia. This is because nowadays the customers are finding the
service which is more convenient to them. So, they cannot get the services from
CIMB Group when they go to the country that do not have CIMB bank.
3. CIMB Group lack of branches in Malaysia compared with other bank company.
Lack of branches will decrease the opportunity for CIMB Group to attract more
customers.

39
3.1.3 OPPORTUNITIES
1. Expansion in international banking to acquire customers outside ASEAN.
2. Collaboration and strategic alliances. These opportunities help the CIMB Group to
decrease the operation cost and increase the efficiency with the collaboration with
other companies.
3. Malaysia has a high economic growth. The growth was sustained by the continued
strength in domestic demand in a split of the challenging global economic
environment. So, the CIMB Group can take advantage to invest.
4. Rise of digital banking. With the growth of technology, the internet access helps
the bank to expand their market more easily.

3.1.4 THREATS
1. There is rigid competition from other existing international and national bank
which result in CIMB Group facing the problem of limited market growth.
2. CIMB Group has threat on facing some technical issues especially for online
credit card transactions.
3. CIMB Group has threat on having the same business segment with competitors
which result in customers have option to choose the best service as customers
have option on choosing what service they want to use.
4. Unstable foreign exchange rate is one of the risks which faced by CIMB Group as
foreign exchange rate always change and result in customers feel uncertainty on
making payment when they are abroad.

40
3.2 TOWS Matrix Analysis
TOWS Matrix Analysis
Opportunities
O1: Expansion in
international banking to
acquire customers outside
ASEAN.
O2: Collaboration and
strategic alliances.
O3: Malaysia has a high
economic growth.
O4: Rise of digital banking
Strengths
S1: CIMB Group have the
strong customers based to
ensure that the business of
the group will operate
continuously.
S2: The large number of
employees in CIMB Group
will ensure that the
operation in CIMB Group is
smooth and effective.
S3: CIMB Group expand
market in the industry.
SO Strategies
S3 + O1 + O3:
Expand international
market effectively
S1 + O4:
Develop digital service to
convenience customer’s
financial procedure
41
Weaknesses
W1: There have
competition from
international banks make
CIMB Group have limited
market growth.
W2: CIMB Group presence
restricted to Southeast Asian
nations, such as Singapore,
Malaysia and Indonesia.
W3: CIMB Group lack of
branches in Malaysia
compared with another bank
company
WO Strategies
W1+W2+O1+O2:
Product and market
development
W3+O4:
Development in digital
banking
Threats ST Strategies WT Strategies

T1: There are rigid S1+T1+T3 W1+T1

competition from other
existing international and CIMB Group have the CIMB Group need to make
national bank which result strong customers which are a joint venture with
in CIMB Group facing the loyal customers’ satisfaction international bank to open a
problem of limited market on CIMB products and better future market
growth. services to overcome rigid
competition and same W3+T3
T2: CIMB Group has threat business segment from other
CIMB Group have to
on facing some technical existing international and
increase their branches in
issues especially for online national bank.
Malaysia for providing
credit card transactions.
S2+T2 better service to their
T3: CIMB Group has threat customers
on having the same business The large number of
segment with competitors employees in CIMB Group
which result in customers will ensure that technical
have option to choose the issues especially for online
best service as customers credit card transactions will
have option on choosing be solved.
what service they want to
use.

T4: Unstable foreign

exchange rate is one of the
risks which faced by CIMB
Group as foreign exchange
rate always change and
result in customers feel
uncertainty on making
payment when they are
abroad.

42
3.2.1 STRENGTHS AND OPPORTUNITIES STRATEGIES
(i) SO1 (S3 +O1+O3) : Expand international market effectively

CIMB Group is the second largest financial company banking industry in Malaysia.
CIMB Group has the strong and large customer base that allow the company run
smoothly and generate income from the customer. In this world economic status, the
market that involve within own country are not effective and efficient to generate income
and grow up the business. In this situation, CIMB Group has collaboration and strategic
alliance with other companies in the same industry. This can help CIMB Group to expand
their business to international market by collaborating with other financial company in
Malaysia. Expand international market can help CIMB Group to generate more income
and increase the company’s performance. Besides that, the economic in Malaysia will be
brought up at the same time that CIMB Group expand their market, this is because the
outsider investor could invest in Malaysia since CIMB Group start their business in
another country.

On the other hand, expand international market has negative site where the amount of
investment will be huge due to the unstable currency rate. If the investment amount is
huge will affect that the company does not have enough liquidity of cash flow to operate
their business when the emergency issue happened. Therefore, expand international
market has the advantage and disadvantage for the company where can grow up the
business but on the other hand can destroy the business when some issue happened.

There are some recommendations that can be suggested to solve the negative site problem
where can consider collaborating with the multinational company that has their sub-
company in another country. This could avoid the currency issue is because the
collaborating company is known-well in that country and the currency is normal for that
company. Besides that, collaborate with the multinasional can ensure that the investment
is secure from the lost investment.

43
 )ii) SO2 (S1 + O4) : Develop digital service to convenience customer’s financial
procedure
In the world of technology, digital and internet is the most important thing to everyone in
this world no matter which activity that need to carry out like banking service, food order
service or online shopping. Therefore, CIMB Group has the opportunity to arise the
digital banking service to their customers and will be attracted to the new user at the same
time.
Develop a digital service is different from expand the business in the traditional way
because digital service has many issues need to consider and plan before proceeding for
the idea. In digital service especially in banking service, the security is the most important
part that need to be strong and well planned. It is because banking service is included
many private information that customers provided and the asset of the customer is kept by
the bank, if the information has disposed to the public due to the low security, then the
digital banking could fail.
CIMB Group has a strong customer base that support on their company, to carry out the
digital service is not a difficult way because the strong customer base has given them the
trust to continue this development. Therefore, to develop a digital service that never tried
before in the company is need the strong customer trust and loyalty to support the group
to continue this project because customers are the main asset of the company.

3.2.2 STRENGTHS AND THREATS STRATEGIES

(i) ST1 (S1+T1+T3) : CIMB Group have the strong customers which are loyal
customers’ satisfaction on CIMB products and services to overcome rigid
competition and same business segment from other existing international and
national bank.

Customers’ satisfaction is important for a company to sustain in the market and compete
with competitors in the market. CIMB Group have to diverse their products and services
in order to show their uniqueness of their products and services. In this case, their
uniqueness can attract and maintain loyal customers of the CIMB Group and thus CIMB
Group able to compete with competitors from the international and nation. CIMB Group

44
 have also possessing the ability in dealing with every complaint which have made by
customers in order to improve the quality of the products and services. By dealing the
complaints made by customers, the sincere apology to customers and keeping promises
with their customers can boost the customers’ satisfaction when consuming the products
and services of CIMB groups. Therefore, strong customers will help to shape the future of
CIMB Groups.

(ii) ST2 (S2+T2) : The large amount of employees in CIMB Group will ensure that
technical issues especially for online credit card transactions will be solved.

The employees of IT department from large number of employees in CIMB Group

possessed a variety of skills in handling the technical issues especially for online credit
card transactions. In this case, CIMB Group should provide training and development to
the employees of the IT department in order to enhance their skills in handling the issue
of CIMB online credit card system experiencing downtime. Therefore, the action taken by
CIMB Group can regain the credibility of the customers. At the same time, it will
improve the goodwill of the CIMB Group.

3.2.3 WEAKNESSES AND OPPORTUNITIES STRATEGIES

(i) WO1(W1+W2+O1+O2) : Product and market development

CIMB may be the leading bank in Southeast Asia, but CIMB will become vulnerable
when competitor from global market attempts to enter the ASEAN market. The downside
of CIMB is they only exist in ASEAN countries and as time goes by, there are many
growing banks in the world. Today, customers are looking for services that are convenient
for them. For example, Malaysian customers will find it difficult to get CIMB services
when they plan to travel to countries outside ASEAN.

In today's economic climate, many organizations are using collaboration and strategic
alliance strategies to reduce costs and increase efficiency. CIMB Bank has launched

45
Quick Response (QR) Payment Acceptance on CIMB terminals, the first-in-the-market to
accept payment from six major mobile wallet payments on one terminal. The six mobile
wallet partners accepted by CIMB terminals are Alipay, Touch & Go Digital, Boost,
KiplePay, Mcash and Vcash. CIMB Group and RippleNet have also go into a strategic
collaboration to achieve instant cross-border payments in their respective markets.
Through these partnerships and strategic alliances, CIMB Group has the opportunity to
enter new markets and increase the visibility of the band.

CIMB Group can leverage its products and services knowledge to reach new customers
and grow. The core business of the CIMB Group is concentrated only in ASEAN
countries, so it is possible to have collaboration in the development of international
market. In order to identify potential market opportunities, CIMB Group needs to conduct
research to verify whether the market it wants to enter is attractive, whether CIMB Group
can adapt to new markets and how CIMB Group maintains its current competitive
advantage in this new market. CIMB Group has several ways to grow its business. First,
increase the current customer usage by increasing the size of the purchase, minimizing
product obsolescence and providing incentives to increase usage. Second, attract
customers from competitors. CIMB can attract customers and keep their customers away
from competitors by creating differences in products and services and increasing
advertising placement. Next, develop new products. CIMB Group can establish new
services or establish partnerships to create new products and services to take advantage of
band identification.

(ii) WO2(W3+O1+O4): Development in online banking

Since the introduction of online banking, banking solutions have undergone tremendous
changes. There are a number of options for withdrawing money, depositing checks or
transferring money without going to the bank. Digital banking is transforming physical
banks into greener, more efficient operations. The online banking function provides us
with banking services anytime, anywhere.

46
 Today, the banking industry is highly competitive, and most banks want to outperform
other banks in the competition. As a result, banks offer advanced websites with a variety
of banking options. The strong features of digital bank on the advanced website include
loan calculators, premium calculators, financial planning tools, tools to help analyze
investment, budget, forecasting and tax preparation. This helps consumers stay alert with
many different features. Thus, most financial plans can be completed efficiently without
having to visit the bank in person. As a result, CIMB Group can achieve maximum
efficiency at the lowest operating cost by reducing the number of physical branches.

Through online banking, CIMB Group has a wide range of opportunities to acquire
customers outside ASEAN. With the rapid development of technology, except for the
third world countries, the Internet can be accessed almost everywhere in the world. The
availability of Internet access makes it easier to engage in business transactions. As a
result, potential investors located in countries without CIMB offices can also invest
through Internet services provided by CIMB Group.

3.2.4 WEAKNESSES AND THREATS STRATEGIES

(i) WT1 (W1+T1) : Joint venture with international bank

The main focus for CIMB Group is their businesses in ASEAN countries. The CIMB
Group faced with strong competitors from international banks. This is because the
international bank have larger customer base compared to the Group. For example,
Standard Chartered is one of the international banks which have a wide coverage of
customers from all over the world. Therefore, the initiative of joining venture with those
international banks will assist CIMB Group reduce their competitors as well as gaining
access to customers internationally and the knowledge of those international banks.

(ii) WT2 (W3+T3) : Increase the branches in Malaysia

The Branches of CIMB Group in Malaysia is 294, compare with other banks such as
Maybank and Public Bank there were far lesser than them. So, the strategy should be used
for CIMB Group is increasing the branches. This can let CIMB Bank increase their sales,

47
 CIMB Group need to increase the branches in Malaysia for providing better services for
them. This can make the customer more convenient to get the services that they needed.
This can increase the number of customers that using the CIMB Group services.

4.0 REFERENCES

Albrecht, W. Steve, James D. Stice, Earl Kay Stice, and Monte Swain. Financial Accounting.
Thomson South-Western, 2005.

Alyssa J. Oon. (2019, Sept 4). You May Be Facing Payment Problems If You Are Using CIMB
Bank Cards. Retrieved from https://says.com/my/news/cimb-facing-card-payment-problems-
according-to-malaysia-airlines

Baker, H. Kent, Erik Benrud, and Gary N. Powell. Understanding Financial Management.
Blackwell Publishing, 2005.

Bernstein, Leopold A., and John J. Wild. Analysis of Financial Statements. New York: McGraw-
Hill, 2000

CIMB Group Holdings Berhad (2019). CIMB. Retrieved from

https://www.cimb.com/en/index.html

CIMB Group Holdings Berhad (2019). Financial Statement 2016. Retrieved from
https://www.cimb.com/content/dam/cimbgroup/pdf-files/annual-
reports/CIMB_FS2016_Eng_Web.pdf

CIMB Group Holdings Berhad (2019). Financial Statement 2017. Retrieved from
https://www.cimb.com/content/dam/cimbgroup/pdf-files/annual-reports/Annual-Report-2017-
Financial-Statements.pdf

CIMB Group Holdings Berhad (2019). Financial Statement 2018. Retrieved from

48
https://www.cimb.com/content/dam/cimbgroup/pdf-files/annual-
reports/CIMB2018_Annual_Report.pdf

Drake, P. P. Financial Ratio Analysis. Retrieved from

http://educ.jmu.edu/~drakepp/principles/module2/fin_rat.pdf
FactSet Research Systems Inc. (25 Oct, 2019). CIMB Group Holdings Bhd. Retrieved from
https://asia.nikkei.com/Companies/CIMB-Group-Holdings-Bhd

Kenton, W. (2019). Profitability Ratios Definition. Retrieved from Investopedia:

https://www.investopedia.com/terms/p/profitabilityratios.asp

MBASkool. CIMB Group Holdings SWOT Analysis, Competitors & USP. Retrieved from
https://www.mbaskool.com/brandguide/banking-and-financial-services/2499-cimb-group-
holdings.html

UK Essay. (2017, May 15). Bumiputra-Commerce Holdings | Analysis. Retrieved from

https://www.ukessays.com/essays/marketing/the-second-largest-financial-services-provider-in-
malaysia-marketing-essay.php

Spring. (2003). Chapter 5. Ratio Analysis, Financial Planning and Financial Analysis. Retrieved
from https://msu.edu/course/aec/853/chapter5.pdf

49