CIMB to become universal banking entity under RM5.3bil deal

  • Nation
  • Tuesday, 07 Jun 2005


The CIMB banking group will emerge as Malaysia's first universal banking entity with its investment banking business being integrated with that of Commerce Asset-Holding Bhd's (CAHB) commercial banking arm, Bumiputra-Commerce Bank Bhd (BCB). 

Under the RM5.3bil deal, CIMB's investment banking business will be taken private and its shareholders given an option to either receive RM5.50 a share in cash or new CAHB shares valued at RM4.80 each.  

The transformation will also result in Datuk Nazir Razak, the younger brother of Deputy Prime Minister Datuk Seri Najib Abdul Razak, becoming the supremo of the new banking group that will oversee the commercial and investment banking operations. Nazir is currently the managing director/chief executive of CIMB Bhd, Malaysia’s largest investment bank. 

Datuk Nazir Razak...managing director/chief executive of CIMB Bhd.

The new bank will have assets worth RM98bil. The country's largest bank, Maybank, has assets of RM179bil. 

“The plan is in line with global trends to consolidate investment and commercial banks,'' CIMB said in a statement. 

The integration will create a financially stronger bank, help minimise duplication of resources and enable CAHB – the country's second largest lender – to cross sell its products and services as it prepares for local and regional acquisitions.  

The Government is encouraging local banks to expand overseas, boost returns and strengthen capacities and capabilities to prepare for the liberalisation of the banking sector by 2007. 

Nazir said: “In order to compete with global players, we must maximise synergies, starting with a higher valued balance sheet and a wider range of product offerings, as well as optimise economies of scale by sharing distribution and reducing duplication of work.'' 

The banking group is seeking acquisitions to further expand overseas. CIMB, already the largest investment bank in South-East Asia, is finalising a deal to acquire the stockbroking business of Singapore's GK Goh Holdings Ltd.  

CAHB, in turn, has a stake in Indonesia's PT Bank Niaga, while BCB has branches in Hong Kong, Singapore, Tokyo, London and Yangon. 

The move by CIMB and Commerce to integrate their commercial and investment banking activities will certainly put pressure on other Malaysian banks such as Maybank to speed up their expansion overseas, this despite the fact that Maybank currently operates in 12 countries through its network of branch subsidiaries, associates and representative offices. 

“The group will be primed to capitalise on potential opportunities,” Nazir said. 

More reports in our Business section 

 CIMB :  [Stock Watch]  [NewsCOMMERZ :  [Stock Watch]  [News

Related Stories:CAHB/CIMB to extend leadership in financial services Nazir’s meteoric rise Milestone for banking sector 

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Did you find this article insightful?


Next In Nation

Man dies, lorry driver hurt after vehicle plunges from flyover following accident near Nilai
Bukit Aman detects involvement of cops in processing, selling ketum juice
Dr M: Opposing Budget 2021 at committee stage will not have significant effect
Air Selangor: Contact 15300 from Dec 1 for queries
Top Glove: 80% of workers at Meru plants tested for Covid-19
Man allegedly threatens father with parang in Rawang
Gang members arrested over ruckus at entertainment outlet
Covid-19: KL construction workers cluster contributed most cases Friday (Nov 27)
Budget 2021: Anwar admits Opposition leaders told not to hold bloc vote during policy stage
Azmin: Passing of Budget 2021 at policy stage no cause for celebration by government

Stories You'll Enjoy