CIMB Group Holdings Bhd, Malaysia’s second-biggest bank, is applying for banking licences in three additional countries to broaden its footprint across the region and cash in on the single market of 10 nations under the Asean Economic Community.
Nazir: Always open to new expansion deals
The bank is seeking licences in Cambodia, Vietnam and Myanmar to tap growth potential there, said group chief executive Nazir Razak.
CIMB Group this month announced plans for a tri-party merger with Malaysia’s fourth-biggest lender, RHB Capital Bhd, and Malaysia Building Society Bhd, aimed at creating the country’s largest bank by assets.
“The merger plan is likely to become successful, but it is too early to say as it is in the negotiation process,” Mr Nazir said. “If it goes through, CIMB will be the top bank in Malaysia.
“We still have a very positive view on Thai and Asean economic growth, so we will continue our business expansion. CIMB will keep acquiring other financial businesses if opportunities open up or pricing is possible. We are always open for a deal.”
CIMB-Principal Asset Management in Thailand yesterday announced the acquisition of Finansa Asset Management (Thailand) for 225 million baht.
The acquisition is meant to further strengthen CIMB-Principal’s presence in the region in line with CIMB Group’s expansion plan.
“Thailand is a core market for our Asean franchise, and the acquisition underscores our commitment to continue to grow our presence here,” Mr Nazir said.
Jumpol Saimala, chief executive of CIMB-Principal in Thailand, said the integration of the two business platforms, which will leverage CIMB-Principal’s presence in the retail mutual fund business and Finansa Asset Management’s strength in the provident fund segment, will strengthen the domestic company.
As of June, assets under management (AUM) at CIMB-Principal in Thailand totalled 34 billion baht, up 36% from the end of 2013.
Its AUM will more than double to 70.4 billion baht upon the acquisition’s completion, when CIMB-Principal will become the 12th-biggest player in the local mutual fund industry, up from 14th now.
The company aims to rank among the 10 biggest mutual fund companies in Thailand within two years.
Moreover, CIMB-Principal’s AUM for provident fund business will increase to 25.5 billion baht, making it the country’s eighth-largest provident fund manager.
Subhak Siwaraksa, president of CIMB Thai Bank (CIMBT), said the local bank could revise its income contribution ratio target to CIMB Group as the group base becomes larger, thanks to the acquisition plan.
CIMBT, 93.7% owned by the Malaysia-based financial group, aims for a contribution ratio to the group of 10% by 2015, up from 7% at present.
For the first half, CIMBT’s return on equity was 6-7%, well below expectations for 15-16%.
The Thai bank’s net profit for the first six months rose to 625 million baht from 544 million in the same period a year earlier.
Shares of CIMBT closed yesterday on the Stock Exchange of Thailand at 2.30 baht, up four satang, in trade worth 4.07 million baht.