The share price of CIMB has fallen by 10% in just 2 days. What's happening?
CIMB delivered a pretty good Q4 2021 financial result announced on the last day of February and investment banks are raising CIMB's target price.
If you look at other banks listed on Bursa, all of them are also delivering great results, and their share price inching higher.
By doing a cross-check on data released by Bank Negara Malaysia, Malaysia's banking system is healthy too.
Banks loans are growing
Non-performing loans are lower
Banks are earning more profit as the net interest margin is expanding.
By checking out several stock forums, we believe that this share price plunge is due to the fear that CIMB will incur an expected credit loss where the bank had credited too much money (RM 280.9 million) to the customers' bank account.
However, if you look at it deeper, the error was related to a specific third party financial remittance service, which we can be sure that CIMB is not the one fully liable. Also, this is not a unique event. Similar cases happen across the globe and banks never lose in these cases.
One can argue that public trust is the utmost important factor for a bank and this had tarnished CIMB's reputation. In fact, this is not CIMB's first blunder and the public trust remains as CIMB is definitely a bank too big to fail.
In short, this is a good entry price to accumulate CIMB in case you had missed the banking stock's outstanding share price performance over the last 12 months.