KUALA LUMPUR: CIMB Group Holdings Bhd
is stepping up efforts to pursue a potential delisting of its Indonesian subsidiary, PT Bank CIMB Niaga Tbk, and plans to engage regulators on the exercise, said CIMB Investment Bank Bhd (CIMB IB).
In a research note today, the investment bank said the move was underpinned by CIMB’s view that CIMB Niaga remained undervalued and the bank’s long-term positive outlook on Indonesia, particularly given Niaga’s strengths in wealth management, corporate banking, ASEAN connectivity, mass affluent banking, and Shariah banking.
It added that three options remained under consideration to address CIMB Niaga’s free-float requirement: placing shares with strategic investors at acceptable valuations, a re-IPO (initial public offering), which appears unlikely under current market conditions in Indonesia, and privatisation, which is currently the more strategic and credible option.
"CIMB noted there are various delisting options available, including arrangements that allow minority shareholders to retain a residual stake post-delisting, citing CIMB Thai’s and CIMB Bank Malaysia’s historical minority ownership arrangement as precedents,” said CIMB IB.
It noted that preserving dividend upstreaming from CIMB Niaga to the group remained a key consideration in evaluating any strategic moves.
"With a common equity tier 1 (CET1) ratio of 23 per cent, CIMB sees scope for capital optimisation, potentially towards 20 per cent, although no formal target has been established.
"CIMB remains disciplined in its approach to mergers and acquisitions, being open only to small bolt-on opportunities in areas such as wealth management, small and medium enterprise banking, and Niaga Shariah, while ruling out large-scale transactions,” it added.
Meanwhile, MBSB Investment Bank Bhd in a separate note said CIMB owned 92.5 per cent of CIMB Niaga, and should CIMB Niaga be taken private at its current 1,550 rupiah per share, it implied a purchase consideration of 2.95 trillion rupiah (RM670 million), while a 30 per cent premium implied a purchase consideration of 3.84 trillion rupiah (RM871 million).
"So, we are looking at an 18 basis point to 23 basis points reduction from the latest 13.9 per cent CET 1 ratio. But we think it will come closer to the lower bound.
"Management stressed that the priority will be to use as little capital as possible, so expect opportunistic stake accumulation on a gradual basis,” it added.
At 10.55 am, CIMB fell two sen to RM7.13, with 4.26 million units changing hands. - Bernama
