CIMB Thai sells auto financing portfolio to Krungsri

CIMB Group expects CIMB Thai’s ROE to improve to double digits after the sale.

CIMB Group Holdings Berhad has sold its Thai bank’s automotive financing portfolio to Bank of Ayudhya (Krungsri) at an undisclosed amount.

After the sale, Malaysian bank expects CIMB Thai’s return on equity (ROE) to improve towards double digit levels and to be accretive to the group over the medium term.

CIMB Thai has been undergoing a comprehensive transformation programme that includes enhancing its operating model, branch and cost base optimisation, portfolio rebalancing, and repositioning towards higher-return banking, according to CIMB.

The sale involves “a modest premium” relative to the auto financing portfolio’s adjusted net book value, CIMB said.

The sale reportedly forms part of its Forward30 strategic plan to exit non-core businesses whilst reallocating capital.