CIMB Group Holdings Bhd, which is implementing a transformation programme in its small and medium enterprise (SME) segment, is targeting double-digit growth in SME loans next year, a reverse from the yearly contraction in the past four years.
The bank, which currently has about 9 per cent market share in SME loans, expects to grow the share to "low- to mid-teens in the next couple of years".
Group chief executive Datuk Seri Nazir Razak said in the first phase of the transformation, the bank focused more on repairing asset quality than growing the asset.
He said CIMB used to have high non-performing loans (NPLs) in the SME sector, of almost 20 per cent.
"Now, it is no longer a problem because the NPL ratio has dropped sharply, we have also strengthened the credit process (and) now we are ready for Phase Two of the transformation.
"I think in 2011, we will be looking at a double-digit loan growth in the SME sector, from the contraction of 5 to 6 per cent over the last four years," Nazir told a news conference after the launch of SME Solutions Expo 2010 by Deputy Domestic Trade, Cooperatives and Consumerism Minister Datuk Rohani Abdul Karim in Kuala Lumpur.
SME loans account for about 15 per cent of CIMB's loan book. Nazir said the NPLs for its SME segment has dropped to 3 per cent.
In the first half of this year, CIMB Bank registered slower contraction in SME loans and a turnaround is anticipated by year-end.
The second phase of the bank's transformation includes better customer engagement, strengthening of the product suite, specialised lending programmes and decentralisation that allows small businesses to apply loans from CIMB branches.
"So, through various initiatives, we are quite confident that in 2011, our SME loans can grow quite rapidly," he said.
Nazir said CIMB, which has presence in eight out of 10 Asean countries, had established regional desks.
He said since the desk was launched six months ago, more customers from Thailand have sought the service as they are interested to set up businesses in Indonesia.
Nazir called on local SMEs to take advantage of the economic growth potential in Indonesia by utilising CIMB's expertise in the regional markets.
Meanwhile, Rohani said in the coming one year, the ministry will be organising a series of roadshows to promote Made-in-Malaysia products.
The roadshows are aimed at bridging the supply by thousands of SMEs in the country and the untapped demand from neighbouring countries.
She urged SMEs to participate in the programmes organised by the ministry, including franchise, direct-selling and SME initiatives.
Source: Business Times
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