It said on Thursday the ratings was in line with CIMB Bank Bhd, which is the key subsidiary of CIMB GROUP HOLDINGS BHD, given CIMB Investment’s strategic role as the group’s investment-banking arm.
Through a universal-banking platform, CIMB Investment is operationally integrated with both CIMB Bank and CIMB Islamic Bank Bhd (both rated AAA/Stable/P1).
RAM said CIMB Investment is a dominant player in the domestic investment-banking arena.
“While the group’s 50:50 joint venture with China Galaxy Securities Co Ltd will result in a deconsolidation of CIMB Investment’s stockbroking operations (scheduled to be completed in 1H 2019), the impact on the Bank’s financial profile will be minimal given the segment's small profit contribution.
“This stockbroking partnership represents part of CIMB Group's cost-rationalisation initiative and will also allow it to retain an equity-distribution platform,” it said.
RAM noted that CIMB Investment’s earnings profile remains inherently volatile, a reflection of the susceptibility of its business activities to market conditions and investor sentiment.
After a 48% y-o-y jump in fiscal 2017, the bank’s pre-tax profit fell 41% y-o-y to RM35mil in 9M fiscal 2018, amid a slowdown in capital-market activities.
As at end-September 2018, CIMB Investment's capitalisation remained robust, with a common-equity tier-1 ratio of 32.5%.
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