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Wednesday April 18, 2012

CIMB will transform into an Asia-Pacific bank

KUALA LUMPUR: CIMB Group Holdings Bhd, which is in a strong capital position, will eventually transform into an Asia-Pacific banking franchise after it completes the acquisition of The Royal Bank of Scotland (RBS) and other additional full-fledged banking licences in South Korea, India and Taiwan.

CIMB is a prime proxy for banks to the wider Asian-Pacific region by virtue of it being headquartered in Malaysia which testifies to its well-known unique melting pot of cultures from all over Asia, CIMB managing director and CEO Datuk Seri Nazir Razak said.

He said this was part of CIMB's newly-coined internal vision called CIMB 2.0 which was to remake the bank as an Asian-Pacific banking franchise while still maintaining its lead as the premier Asean bank.

“CIMB 2.0 is about leveraging on synergies between the various components of banking, treasury and the markets. CIMB 2.0 is about integrating the RBS platform and strengthening the overall position within Asean and also leveraging on our new status as Asia-Pacific's largest investment bank and Asia-Pacific's premier banking destination,” Nazir told a press conference yesterday.

Please, one at a time: Nazir surrounded by reporters yesterday.

“In order to be a leading Asean franchise, one needs to be well connected to economies and markets that interact with Asean, especially the key ones. That explains why we need a significant presence beyond Asean and, hence, the acquisition of RBS' banking platform.”

CIMB was the biggest in Asia-Pacific in terms of presence and size in investment banking and this was Asia-Pacific-based, he said, adding: “For a start, we wish to do stockbroking and advisory in all our markets.”

In China, meanwhile, Nazir said that it aimed to “beef up” its Chinese operations with the bigger picture aim to advice Asean investors who hoped to do business there. As this stage, Nazir also ruled out applying for a full-fledged banking licence in China and wanted to focus on tapping upcoming business opportunities between Asean and China.

CIMB is also eyeing a corporate finance and stockbroking licence in New York and London, and is also studying two more possible acquisitions in Thailand.

“We will eat what we can digest,” Nazir quipped.

Meanwhile, Nazir said CIMB did not need to raise additional capital for the acquisition of RBS and likely acquisition of a significant stake of up to 60% in Philippine-based bank San Miguel Corp's Bank of Commerce (BoC).

“No plans. We have calculated our capital requirements to include the acquisition of the RBS platform as well as the possible desired stake in the BoC.

“We are comfortable the capital levels that we have today after paying out the 40% of last year's earnings as dividends is sufficient for us to make these acquisitions. There is absolutely no plan to raise any further capital,” he said.

Nazir was also asked repeatedly by journalists to reveal further details of the stake acquisition in the BoC but replied that “it is not right for me to dribble information now the right thing to do is that when all the information is there then we will announce it.”

He added that CIMB would reveal more details on this “very soon” a day after BoC chairman Jose Pardo was reported as saying that the signing would happen “shortly” with the deal awaiting the approval of the Philippine central bank.

On the recent RBS acquisition, meanwhile, Nazir said the transaction had minimal duplication of resources, including that of manpower and that it would likely not need to reduce staff headcount.

“Of course, the first thing to do is wait for the outcome of the offer letters first then we will know the number of people that will come on board. We don't expect any need at this moment to reduce staff but we may have to look at it when the time comes,” Nazir said.

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