CIMB suffers RM280 million 'credit loss' from duplicate payments

[KUALA LUMPUR] CIMB Group Holdings Bhd said it incurred a credit loss of 280.9 million ringgit (S$91 million) in 2021, from a processing error that led to excess funds being deposited in some customer accounts.

The Malaysian lender, which counts sovereign wealth fund Khazanah Nasional Bhd as its largest shareholder, discovered the problem this year that related to a third-party remittance service, group chief executive Abdul Rahman Ahmad said in a statement, confirming a report by Bloomberg News.

The group is taking steps to recover the duplicate payments from the affected customers and an "additional and lower final provision amount may be taken in the first quarter of 2022", depending on the recovery, he said, upon releasing the lender's fourth quarter and full year earnings.

CIMB reported net income of 4.3 billion ringgit in 2021, its strongest annual figure since 2019, according to data compiled by Bloomberg.

Malaysia's central bank asked the lender to provide "reasonable options" for customers to return the excess money, Bank Negara Malaysia Governor Nor Shamsiah Mohd Yunus told reporters during a virtual briefing on Malaysia's fourth quarter gross domestic product results on Feb 11. The central bank would take appropriate supervisory and enforcement actions on CIMB if its findings reveal any breach of legal or regulatory requirements, she said.

CIMB's technical glitch comes as South-east Asian banks come under scrutiny over issues with their digital infrastructure. In December, about 790 customers of Singapore's Oversea-Chinese Banking Corp (OCBC) lost a total of S$13.7 million in scams. A month earlier, thousands of DBS Group Holdings Ltd's customers were unable to log onto its online and mobile platforms.

BLOOMBERG