CMB International to maintain strong profitability through 2026

Returns will be supported by robust fee and commissions income.

CMB International is expected to enjoy sound profitability, moderate liquidity and funding positions, and improved asset quality over the next 12-18 months, says Moody’s Ratings.

These will mitigate risks associated with its high earnings volatility and rising leverage, it added.

CMB International’s return on average assets (ROAA) is expected to be at or above 1.2%. Returns will be supported by robust fee and commissions income from its well-established asset management business, as well as its growing wealth management business, Moody’s noted.

In the past two years, the company has achieved a 20% increase in asset management fee income.

“Nevertheless, we expect CMB International's earnings to remain volatile over the next 12-18 months, as it continues to consolidate several PE funds whose performance remains sensitive to market fluctuations,” the ratings agency said.

CMB International has also reportedly rebalanced its investment portfolio towards high-quality, liquid assets such as certificates of deposits and high-grade bonds.

The company has also reduced exposures to private equity (PE) funds, which are less liquid than publicly listed equities due to longer lock-up periods, and more volatile than bonds given their equity-linked valuations, Moody’s said.