In a statement, it said net credit cost (NCC) is expected to stay steady at 30 to 40 basis points.

“Besides, we are not overly concerned about any potential asset quality deterioration as we reckon CIMB is better equipped than prior slumps, loan loss coverage (LLC) is now at 97% versus the pre-pandemic level of 75%,” it said.

Yesterday, CIMB reported a strong performance for the financial year ended Dec 31, 2023 (FY2023) with its net profit jumping 28.3% to RM6.98 billion from RM5.44 billion in the preceding year.

“All in all, we still believe CIMB’s risk-reward profile is balanced since the share price has done well in recent months and it is not inexpensive. Plus, its foreign shareholding level of 31% is close to its 5-year peak.

“We keep a ‘hold’ call rating with a higher target price (TP) of RM6.55 per share,” said HLIB.

Meanwhile, RHB Investment Bank Bhd said CIMB is still a top pick in the sector, hence the research house increased its FY2024-FY2025 forecasted profit after tax and minority interests by 9-10% following the better-than-expected results.

“We raise our TP to RM7.35 per share. Our TP includes an unchanged 2% environmental, social and governance (ESG) discount, based on CIMB’s 2.9 ESG score,” it said.

As at 5pm, CIMB’s share price was down by 12 sen or 1.86% at RM6.34, giving it a market capitalisation of RM67.62 billion.