FIN435 – FINANCIAL MARKET AND BANKING SERVICES

GROUP ASSIGNMENT

REPORT PREPARED BY:

No. Name Student ID
1. NURUL FARHANA BINTI ABD GHANI 2021186901
2. NAZIRAH BINTI MOHAMED KAUZI 2021938445
NURHIDAYATUL HAFIZAH BINTI
3. 2021349235
ISHAK

GROUP : NBF3A
LECTURER : PN SITI NORBAYA BINTI MOHD RASHID
 ACKNOWLEDGEMENT

Firstly, praise and thanks to Allah SWT, the Almighty, for His showers of blessing
throughout to complete this report assignment of

We would like to express our deep and sincere gratitude to lecturer, Puan. Siti
Norbaya Binti Mohd Rashid (Fin435: Financial Market and Banking Services), for giving us
opportunity to do this assignment and providing invaluable guidance throughout these. Her
dynamism, vision, sincerity and motivation have deeply inspired us. She has taught us a lot
to carry out the assignment and to present the assignment as clearly as possible. It was a
great privilege and honours to work and study under her guidance. We grateful for what she
has offered to us. Also we would like to thank to her for his friendship, empathy, and great
sense of humour.

Extremely grateful to my family’s members for their love, prayers and continuing
support, caring and sacrifices for educating and preparing us for our future. Huge thanks to
my collage’s friends for their constant encouragement and for their genuine support
throughout this assignment.

Finally, our thanks go to all the people who support us to complete the assignment
directly or indirectly.
Table of Contents
BACKGROUND OF CIMB BANK 1
KEY SUBSIDIARIES 1
CIMB INTERNATIONAL OPERATIONS 2
KEY PRIORITIES / OBJECTIVES AND DEVELOPMENT SEEN IN 2020 2
CONTRIBUTION OF THE DEVELOPMENT OF ITS SURROUNDING COMMUNITIES 3
KEY FINANCIAL PERFORMANCE OF THE BANK FOR THE YEAR 2020 3
ACHIEVEMENTS OF THE BANK IN 2020 4
DIGITAL BANKING (FINTECH) 4
PROSPECT OR FUTURE OF DIGITAL BANKING IN MALAYSIA 5
COUNTRIES WHO ALREADY HAVE DIGITAL BANKING ON THE BANKING INDUSTRIES’
PERFORMANCE AND ACCEPTANCE BY THE PUBLIC 5
RISKS OR CONSTRAINTS FACING BY THE MARKET PLAYER IN DIGITAL BANKING 6
REFERENCE 7
BACKGROUND OF CIMB BANK BERHAD

CIMB Group Holdings Berhad is a Malaysian universal bank headquartered in Kuala

Lumpur and operating in high growth economies in ASEAN. CIMB Group is an indigenous
ASEAN investment bank. CIMB has a wide retail branch network with 1,080 branches across
the region.

The group operates under several entities, which include CIMB Investment Bank, CIMB
Bank, CIMB Islamic, CIMB Niaga, CIMB Securities International and CIMB Thai. The
group's business activities are primarily in the areas of Consumer Banking, Wholesale
Banking, comprising Investment Banking and Corporate Banking, Treasury & Markets, and
Group Strategy & Strategic Investments, with its core markets being Malaysia, Indonesia,
Singapore and Thailand. CIMB Islamic operates in parallel with these businesses, in line with
the group's dual banking model.

The group has over 40,000 employees located in 18 countries, covering ASEAN and major
global financial centres, as well as countries in which its customers have significant business
and investment dealings.

The group's geographical reach and its products and services are complemented by
partnerships. Its partners include the Principal Financial Group, Bank of Tokyo-Mitsubishi
UFJ, Standard Bank and Daewoo Securities, among others.

KEY SUBSIDIARIES

CIMB has a wide retail branch network with 1,080 branches across the region. The group
operates under several entities, which include CIMB Investment Bank, CIMB
Bank, CIMB Islamic, CIMB Niaga, CIMB Securities International and CIMB Thai.

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CIMB INTERNATIONAL OPERATIONS

1. Brunei
 Investment banking and advisory services
2. Indonesia
 Security underwriting, corporate finance advisory (merger & acquisition),
Islamic and conventional banking.
3. Philippines

 Conventional banking

4. United Kingdom, Laos, Hong Kong, China, Vietnam Singapore & Thailand
 Banking & cash equities services, foreign exchange, loan services, deposits,
remittance and overseas mortgages and investment banking
5. Cambodia
 banking products and services including consumer, commercial and corporate
& transaction banking
6. Sri Lanka & Korea
 Investment banking, equities brokerage and research coverage.
7. Myanmar
 Liaison and advisory services for Malaysian companies seeking to do business
in this fast-growing emerging economy.

KEY PRIOROTIES / OBJECTIVES FOR CIMB BANK AND DEVELOPMENT

SEEN IN 2020

As a leading ASEAN bank, their greater purpose is to advance customers and society towards
a sustainable future. In line with this, their integrate economic, environmental and social
(EES) considerations into all aspects of their business. Their strategy is two-pronged. Their
commit to investing resources and influencing networks to reduce negative EES impacts.
They are also aspire to create a net positive impact through our business activities.
Sustainability as one of the key elements of their strategic theme to become a purpose-driven
organisation. As they are strive to be a top quartile bank in ASEAN under their Forward23+
strategy, they are target to achieve the 75th percentile of the Dow Jones Sustainability Index
(DJSI) ranking by 2023.

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CONTRIBUTION OF CIMB BANK TO THE DEVELOPMENT OF ITS
SURROUNDING COMMUNITIES

CIMB Bank contribute to its surrounding communities by Digital Skill Training. CIMB Bank
recognise the need to continuously boost the skills of both their current and future workforce.
One of their future-proof strategies has been to establish the CIMB 3D (Digital, Data, and
Design) Academy. While the idea is to enhance the digital quotient of all CIMBians across
functions, their long-term aspiration is to build an agile, innovative and tech-savvy
workforce, which will meaningfully contribute to the digital transformation of the Group. The
3D Academy competency framework is anchored on six pillars, namely digital world
awareness, agile and entrepreneurial thinking, future communication skills, risk and
governance, human-centred design, and data science and analytics.

KEY FINANCIAL PERFORMANCE OF THE BANK FOR THE YEAR 2020

For the full financial year of 2020, CIMB group posted a 73.8% year over year drop in net
profit to RM1.19 billion, while revenue fell 3.4% to RM17.19billion. Stated that financial
year 2020 performance was largely impacted by the Covid-19 pandemic, resulting in elevated
loan provisions arising from accounting adjustments incorporating macroeconomic factors
and management overlays

Meanwhile, financial year 2020 gross loans registered a slight decline of 1% year over year
as the CIMB took steps to de-risk its balance sheet. Total deposits grew 2.3% mainly due to a
22.6% growth in current account savings account (CASA), and the CASA ratio continued to
strengthen to 41.3% as at December 2020 compared to 34.4% a year earlier. CIMB loan-to-
deposit ratio stood at 89%. The gross impaired loan ratio stood at 3.6% as at December 2020,
with allowance coverage of 91.6%.

Also, CIMB remains well-capitalised with its highest CET1 ratio of 13.3%, including the
reinstatement of regulatory reserve from retained earnings, and a total capital ratio of 17.6%
as at December 2020.

ACHIEVEMENTS OF THE BANK IN 2020

In 2020, CIMB has achieved many encouraging achievements and received more than 30
awards and part of it is;

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 i. Best Investment Grade Bond – Malaysia awarded by The Asset Triple A
Sustainable Capital Markets Country & Regional Awards 2020
ii. Top 3 Most Preferred in Banking awarded by Graduates’ Choice Awards
iii. Best Islamic & Conventional Finance Deal of the Year awarded by Alpha
Southeast Asia 14th Deal and Solution Awards 2020
iv. Best SME Bank – Malaysia awarded by Global Business Outlook (GBO) Awards
2020
v. Best Private Bank in Malaysia awarded by Global Finance Private Bank Awards
2020
vi. Best in Building Digital Transformation – CIMB Niaga awarded by Top Digital
Company Award 2020

DIGITAL BANKING (FINTECH)

Financial technology (Fintech) is used to describe new tech that seeks to improve and
automate the delivery and use of financial services. At its core, fintech is utilized to help
companies, business owners and consumers better manage their financial operations,
processes, and lives by utilizing specialized software and algorithms that are used
on computers and, increasingly, smartphones. Fintech, the word, is a combination of financial
and technology 

As an example CIMB Bank has introduced Quick Response (QR) Payment Acceptance at
CIMB terminals. The bank claims to be first in-market to introduce QR payment acceptance
to accept six major mobile wallets on one terminal.

The six mobile wallet partners to be accepted on CIMB terminal are Alipay, Touch & Go
Digital, Boost, KiplePay, Mcash, and Vcash

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PROSPECT OR FUTURE OF DIGITAL BANKING IN MALAYSIA

Digital banking can offer more cost effective user-friendly services than their more traditional
counterparts due to they have new technological capabilities and lower operational costs and
capital expenditures per customer. It can also encourage modernisation in the banking and
financial sector thus moving it towards modern digitalisation era that increase the quality of
banking services.

Digital banking holds a promising future when approximately 40 interested parties applied its
license when Bank Negara Malaysia (BNM) launched the digital banking framework on
December 2020 and now are working on issuing up to 5 digital banking licenses in 2022.

With digital banking, many Malaysia’s underserved and unserved population especially gig
workers or freelance workers whom many do not have salary slips which banks needed as
part as credit assessment to have access to financial product such as loans and digital
banking can benefit them to get loans as digital banks operating models are different than
traditional banks.

Furthermore, digital banking can benefit people who lives in the rural area that do not have
physical access to bank branches after all about one-fourth of Malaysia population is rural
especially Sabah and Sarawak rural area.

COUNTRIES WHO ALREADY HAVE DIGITAL BANKING ON THE BANKING

INDUSTRIES’ PERFORMANCE AND ACCEPTANCE BY THE PUBLIC.

In Asia, there are quite a few countries that already have digital banking which are Hong
Kong, Korea, Singapore and Taiwan. Digital banking goes by different name depending on
the country. For example in Hong Kong, they are called “virtual bank”, “internet-only banks”
in Korea and Taiwan and in Singapore are called “digital banks”.

In Hong Kong digital banks received positive responds from its public because of their
competitively price products and established end-to-end customer journey and as of May
2021 there are already 8 digital banks operated in Hong Kong which are listed below;

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 1. Airstar Bank Limited
2. Ant Bank (Hong Kong) Limited
3. Fusion Bank Limited
4. Livi Bank Limited
5. Mox Bank Limited
6. Ping An Oneconnect Bank (Hong Kong) Limited
7. Welab Bank Limited
8. Za Bank Limited

RISKS OR CONSTRAINTS FACING BY THE MARKET PLAYER IN DIGITAL

BANKING
There is few risk or constraints facing by market player in digital banking, among it is
traditional banking habit. People are so used to the traditional banking by going to the bank to
do business be it to apply for a loan to transfer money. Thus, it is going to take time for
consumer to start switching to digital banking.

Furthermore, security is the most challenging risk for digital banking marketer due to in
traditional banking, a robber would have to involve a lot of danger and risk to break into the
vault and try to make an escape with the money. Meanwhile for digital banking, to break into
someone’s personal account a cybercriminals only need certain personal information to steal
their money and it can be done anonymously and does not involve as much as physical
danger as in traditional banking. As a matter of fact, there was fraud through online banking
and approximately 130 million British pounds were stolen.

Last but not least, technical issues are among one of the risk of digital banking. A single
technical issue like a bug in their code or system crash can cost a bank millions and causes
the bank to shut down at least a day since digital banking depend massively on online
platforms. Since a lot more people nowadays use online banking, customer may not be able
to do transaction any make payment if bank have to shut down even for a day. It also can
cause the bank to losses its customer.

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References

Mehmet Kerse, Ivo Jenik. (17 Nov 2020). Some Countries Have Digital Bank Licenses,
Other Have Digital Banks. https://www.cgap.org/blog/some-countries-have-digital-bank-
licenses-others-have-digital-banks

Sheila Mitham. (13 August 2017) 5 Issues and Challenges in The Online Banking Sector.
https://blog.inboundfintech.com/5-issues-and-challenges-in-the-online-banking-sector

https://www.hkma.gov.hk/eng/key-functions/banking/banking-regulatory-and-supervisory-
regime/virtual-banks/

Jocelyn T, (April 2021) What Is Digital Banking And How Will It Benefit Malaysia.
https://vulcanpost.com/740796/digital-banking-malaysia-benefits-business-individual/

Oriol Caudevilla. (7 Dec 2020). OPINION- Singapore’s and Hong Kong’s Fin Tech sense:
complementary rather than excuding. https://www.macaubusiness.com/opinion-singapores-
and-hong-kongs-fintech-scenes-complementary-rather-than-excluding/

(CIMB sees improved performance in 2021 2021)

https://www.thestar.com.my/business/business-news/2021/02/27/cimb-sees-improved-
performance-in-2021

(CIMB Bank)
https://www.cimb.com/en/who-we-are/awards/2020.html

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