CAHB goes from strength to strength

By p.w. thong

IT’S not easy to track the gains that an investor holding on to Commerce Asset-Holding Bhd (CAHB) shares would have made since 1990 considering the numerous corporate developments the group has undergone in the course of its history. 

CAHB has had its share of complex schemes involving corporate mergers and exercises over the years, which have transformed it into the country’s second largest banking group after Malayan Banking Bhd. 

In fact, since 1990, the group – formerly known as Bank of Commerce (M) Bhd – has made a number of cash calls, both rights issues and bonds, to finance its expansion programmes. 

It made two rights issues – one in 1990, on the basis of one-for-two at RM2.60 per share – and a second in 1997, on a one-for-five basis at RM6.50 per share. CAHB also made a transferable subscription rights (TSR) issue of one-for-three in 1993 at 85.5 sen per unit. The TSR, which could be converted to mother shares at RM6.30 between 1993 and 1998 was out-of-the-money in late 1997 and 1998 due to the onset of the Asian financial crisis. 

Its subsequent warrants of one-for-eight, expiring in mid-March last year, however were in-the-money, and were issued at a conversion price of RM7.45. CAHB also declared two bonus issues – in 1997 and last year. 

All in, a shareholder who had held on to one lot of CAHB from 1990 till now would have raked in an estimated net gain of nearly RM15,000, with the original lot having grown to about eight lots as of late last year. 

The CAHB group’s history can be traced back to the early 1920s, when it started out as a family bank known as Bian Chiang Bank Ltd in Kuching, Sarawak. In 1975, Fleet Group Sdn Bhd bought a 100% stake in Bian Chiang Bank, making the bank a wholly-owned unit of the Fleet group. 

In 1979, Bian Chiang Bank changed its name to Bank of Commerce Bhd (BCB) when Morgan Guaranty International Finance Corp, a subsidiary of Morgan Guaranty Trust Co of New York, acquired 30% of the issued share capital of the Sarawak bank. 

Subsequently, the bank moved its headquarters to Kuala Lumpur from Kuching. 

In 1986, BCB went through another ownership change when Morgan Guaranty International Finance sold back its 30% stake to Fleet Group. A year later, the Fleet Group sold approximately 20% of its stake to Pitisan Sdn Bhd. The group went public and was listed on the KLSE main board later that year. 

In July 1986, the group added a merchant bank to its stable when it acquired 51% equity interest in Commerce International Merchant Bankers Bhd (CIMB). It then ventured into stockbroking after CIMB acquired an existing stockbroking company and renamed it CIMB Securities Sdn Bhd. 

In 1991, BCB was involved in a composite scheme of merger with United Asian Bank Bhd (UAB). UAB itself was the result of a three-way merger between Indian Overseas Bank Ltd, Indian Bank Ltd and United Commercial Bank Ltd. 

BCB was renamed Commerce Asset-Holding Bhd (CAHB) after the union. 

CAHB’s latest merger was in 1999 when it successfully married its commercial bank, Bank of Commerce (M) Bhd with Bank Bumiputra Malaysia Bhd to form Bumiputra-Commerce Bank Bhd. 

CAHB today is a well-diversified financial services group with interests ranging from commercial and merchant banking, stockbroking, offshore banking, leasing, factoring, futures broking, fund management, unit trust management, and venture capital to life insurance.