CIMB Group Holdings Berhad has agreed to sell the automotive financing portfolios of its Thai banking subsidiaries to Bank of Ayudhya and Krungsri Auto, marking a significant capital reallocation step under the Malaysian banking group’s Forward30 strategic plan. The transaction, announced on May 5, 2026, is part of a wider effort by CIMB to exit underperforming non-core assets across the ASEAN region and redirect capital toward higher-return segments.
Key Facts At A Glance
- CIMB Group Holdings Berhad announced the sale on May 5, 2026
- Seller: CIMB Thai Auto Company Limited and WorldLease Company Limited, both subsidiaries of CIMB Thai Bank Public Company Limited
- Buyer: Bank of Ayudhya Public Company Limited and its unit Ayudhya Capital Auto Lease Public Company Limited (Krungsri Auto)
- Transaction price: At a modest premium to adjusted net book value; exact financial terms not publicly disclosed
- Capital impact: Expected to unlock approximately RM 1.3 billion in excess capital through a reduction of approximately RM 8.5 billion in risk-weighted assets
- Auto loans comprised 13% of CIMB Thai’s total loan book but generated disproportionate credit costs, at times exceeding 100% of total provisions
- The portfolio incurred approximately 2.8 billion baht (RM 340 million) in losses over two years
- CIMB Thai reported a net profit of 908.2 million baht in the first quarter of 2026, up 8.4% year-on-year
- CIMB Group’s full-year 2026 financial guidance already incorporates the sale impact and related one-off costs
- Completion is expected within 2026, subject to closing conditions
A Non-Core Exit Years In The Making
CIMB Group Holdings has agreed to sell the automotive financing portfolios of CIMB Thai Auto Company Limited and WorldLease Company Limited, both subsidiaries of CIMB Thai Bank, to Bank of Ayudhya and its automotive finance arm, Ayudhya Capital Auto Lease Public Company Limited (Krungsri Auto). The sale is priced at a premium to adjusted net book value and is expected to close within 2026.
The disposal is a direct output of CIMB’s Forward30 plan, the group’s medium-term strategy centred on portfolio sharpening and capital efficiency. Group Chief Executive Officer Novan Amirudin described the transaction as reflecting disciplined execution of Forward30, with CIMB Thai to focus on wealth management, intra-ASEAN trade flows, and cross-border corporate banking going forward. The group is targeting CIMB Thai’s return on equity toward double-digit levels over the medium term, and is tracking a group-level ROE target of 12% to 13% by 2027.
A Drag That Outweighed Its Size
The auto loan portfolio’s exit has been framed by analysts as removing a persistent earnings drag. While auto loans comprised only 13% of total loans, they contributed disproportionately to credit costs, occasionally exceeding 100% of total provisions. The unit accumulated approximately 2.8 billion baht in losses over two years, making its capital consumption structurally difficult to justify within a broader regional banking group.
Hong Leong Investment Bank Research described the transaction as highly accretive, estimating that it unlocks around RM 1.3 billion in excess capital through a reduction of approximately RM 8.5 billion in risk-weighted assets. CIMB Thai’s portion of the group’s risk-weighted assets had already declined from 12% in FY24 to 10% in FY25, with the disposal expected to reduce that contribution further.
CIMB Thai’s Narrowing Focus
Following the portfolio sale, CIMB Thai’s business model will sharpen around segments where the bank holds clearer competitive advantage within the ASEAN banking corridor. CIMB Thai will continue leveraging its domestic franchise to support intra-ASEAN trade and investment flows, cross-border corporate banking, and affluent client services. The strategic reorientation mirrors steps already taken under the earlier Forward23+ plan, which saw CIMB exit CIMB Thai Commercial and reduce small and medium enterprise exposure that had been a source of legacy non-performing loans.
In the first quarter of 2026, CIMB Thai posted a net profit of 908.2 million baht, up 8.4% year-on-year, though operating income continued to decline by 3.1% and net interest margin narrowed to 1.96% from 2.04% a year earlier. The non-performing loan ratio improved to 2.1% from 2.2% at end-2025.
Krungsri Consolidates Auto Finance Position
For the buyer, the acquisition deepens an already substantial position in Thailand’s vehicle finance market. Krungsri Auto holds roughly one-third of Thailand’s used car finance market. Krungsri President and CEO Kenichi Yamato said the deal expands Krungsri Auto’s reach and connects acquired customers to the group’s broader product and digital platform under its ONE Krungsri Collaboration pillar. Krungsri’s parent, Bank of Ayudhya, is majority-owned by Mitsubishi UFJ Financial Group of Japan.
Yamato described Thailand’s operating environment as shaped by high household leverage and sector-specific constraints, with GDP growth projected at 1.5% to 1.7% for 2026. Despite the cautious macro backdrop, Krungsri’s ASEAN operations expanded 2.5% quarter-on-quarter in the first three months of 2026.