CIMB Thai Bank (CIMBT) is poised to capitalize on a growing market for sustainability-linked loans, anticipating a demand of 200 billion baht from large corporate clients over the next two years, particularly within the oil, gas, and energy sectors.
Jason Lee, the head of sustainability at CIMBT, indicated that approximately 300 major Thai corporations are seeking transition financing, which is expected to drive this demand.
Currently, CIMBT is awaiting its parent company, CIMB Group, to finalize its medium-term business plan for 2025-2030 before setting specific targets for sustainable finance. From 2021 to 2024, CIMB Group has allocated 100 billion ringgit (around 770 billion baht) toward sustainable finance initiatives.
Between 2022 and 2023, CIMBT provided 30 billion baht in sustainable financing to large local firms, which represents 4-5% of its overall corporate loan portfolio. CIMB Group aims to increase the proportion of sustainable financing in its total loan portfolio each year, following guidance from Malaysia’s central bank to expand sustainable finance to eventually constitute 50% of total loan portfolios.
Mr. Lee noted that CIMB Group is likely to announce ambitious sustainable finance targets in its forthcoming five-year business plan, with CIMBT aiming to elevate its sustainable finance portfolio to 20% of its total corporate loans by 2030.
Focusing on the oil, gas, and energy sectors, CIMBT seeks to assist businesses in transitioning to more sustainable practices. Although the Bank of Thailand encourages commercial banks to help local companies reduce carbon emissions, it has not set specific targets for the proportion of sustainable finance within banks’ loan portfolios.
Currently, sustainable finance represents around 5% of total corporate loan portfolios in the commercial banking sector, although one state-owned bank has successfully increased its sustainable finance portfolio to 20%.
Beyond sustainability-linked loans, CIMBT is expanding its offerings to corporate clients to include transition loans, transition bonds, and sustainable derivatives. The bank has also founded an ESG Advisory unit dedicated to helping Thai companies shift to lower carbon operations, aligning with international net-zero emission standards.
