PETALING JAYA: CIMB Group Holdings Bhd and China Galaxy Securities Co Ltd (CGS) have completed the sale and purchase of 50% interest in CIMB Securities International Pte Ltd.
Following the sale, both CIMB and CGS are now 50:50 shareholders of CIMB Securities International and the entity will be rebranded as CGS-CIMB Securities once relevant regulatory approvals are obtained.
“The transaction will improve CIMB’s cost-to-income ratio by over 100 basis points and Core Equity Tier 1 ratio by around 10 basis points,” CIMB said in a statement yesterday.
“The joint venture (JV) marks the first foray by a China-based stockbroker into South-East Asia, and the start of a long-term strategic partnership between CIMB and CGS,” it added.
CIMB Securities International is the holding company of CIMB’s ex-Malaysia stockbroking business.
It comprises institutional and retail brokerage, and equities research in Indonesia, Singapore, Thailand, Hong Kong, South Korea, India, the United Kingdom and the United States.
“We are delighted with the successful completion of this JV with China Galaxy International.
“This heralds the beginning of a scalable Pan-Asian brokerage led by two formidable groups, one in Asean and the other in China,” group chief executive of CIMB Tengku Datuk Seri Zafrul Aziz said in a statement.
“This move also reflects CIMB’s proactive pivot in response to the changing landscape of the stockbroking industry.
“With superior solutions and greater market access, I am confident that the JV will be successful in delivering better value to our existing and future clients,” he added.
The stockbroking JV will benefit from CIMB’s established network and footprint in South-East Asia, and CGS’ technological know-how, wide client base, as well as deep presence in and access to the Chinese market, it said.
CIMB and CGS also said they see this JV as the first step to facilitate greater investment and capital flows between their respective markets.
“South-East Asia is an important part of CGS’ strategic growth plans and the collaboration with CIMB will position the JV as the stockbroker of choice in Asia to ride on the increasing trend of cross-border investments under China’s Belt and Road Initiative,” CGS’ chief executive officer Derrick Lau said.
“We are confident that together with CIMB and the team at CIMB Securities International, by sharing a common vision and goals going forward, the JV will scale new heights in the Asian stockbroking industry,” Lau added
The statement said that the inclusion of CIMB’s Malaysia stockbroking business into the JV is targeted to be completed by the first half of 2018.