CIMB commences brokerage JV with China Galaxy Securities

Tengku Datuk Sri Zafrul Aziz, group chief executive, CIMB Group (second right) accompanied by Gurdip Singh Sidhu, group chief strategy officer, CIMB Group (far right); and Datuk Kong Sooi Lin, CEO, CIMB Investment Bank, and executive director, group head investment banking, CIMB Group (second left) at the signing ceremony via a telepresence session

KUALA LUMPUR: CIMB Group Holdings Bhd has completed the sale of 50% interest in CIMB Securities International Pte Ltd (CSI) to China Galaxy Securities Co Ltd (CGS).

WIth the sale, CIMB's cost-to-income ratio is expected to improve by over 100bps and Core Equity Tier 1 ratio by around 10 bps.

The two companies are now equal shareholders of the joint venture, which will be rebranded as CGS-CIMB Securities once regulatory approvals are obtained.

CSI is the holding company of CIMB’s ex-Malaysia stockbroking business comprising institutional and retail brokerage, and equities research.

According to a press statement, the joint venture marks the first foray by a Chinese stockbroker into Southeast Asia. 

"The stockbroking JV will benefit from CIMB’s established network and footprint in Southeast Asia, and CGS’s technological know-how, wide client base, as well as deep presence in and access to the Chinese market. 

"CIMB and CGS also see this JV as the first step to facilitate greater investment and capital flows between their respective markets," it said.

"This heralds the beginning of a scalable Pan-Asian brokerage led by two formidable groups, one in ASEAN and the other in China. This move also reflects CIMB’s proactive pivot in response to the changing landscape of the stockbroking industry," said CIMB group chief executive Tengku Datuk Sri Zafrul Aziz.

China Galaxy International Financial Holdings Ltd CEO Derrick Lay added that the collaboration will position CSI as the stockbroker of choice in Asia to ride on the increasing trend of cross-border investment under China's Belt and Road Initiative.