Fifty years of Asia: The Region that Roared
9 May, 201950 Years of Asia: Laura Cha, HKEX
9 May, 2019Euromoney, May 9 2019
Read the full article here: https://www.euromoney.com/article/b1f8yvnk5p7js9/zafrul-aziz-planned-transformation?copyrightInfo=true
When Zafrul Aziz became chief executive of CIMB in 2014 he embarked upon a transformation plan called T18, or Target 2018. Although CIMB was at the time the fourth or fifth largest bank in southeast Asia, it was not among the leaders in terms of profitability, return on equity, cost-to-income ratio or capital.
“We were down there because we were in expansionary mode,” Zafrul says. “We did a lot of mergers and acquisitions to grow to where we are, but along the way markets turned against us and the investment banking franchise was affected.”
Hence the focus on reducing costs (the cost-to-income ratio stood at 59% when the strategy started, the highest among the 12 banks CIMB considered to be a peer group) and the capital adequacy ratio, which had been as low as 8%.
It was a painful process – the bank exited Australia, sold half of its international brokerage business, shut down Thai credit cards and cut headcount from 42,000 to 36,000 – but all the targets in T18 were achieved.
In March, Zafrul announced a new strategy called Forward23, for the next five years.
“Forward23 is about getting the engine up,” he says. “We have done the consolidation part and we have a very good base. Now we are telling our troops we need to start growing faster.”
He describes the slowing and consolidation of the last few years as “like a plane. We want to fix it, but doing so when it’s flying is difficult. So we land the plane, fix some of the things and it’s done.” Forward23 is about the bank taking off again.
