CIMB Group confident as a standalone bank

by IZZAT RATNA

CIMB Group Holdings Bhd is not seeking any immediate mergers and acquisitions (M&A) in Malaysia, as it continues to strengthen its position within the Asean region.

Group CEO Tengku Datuk Seri Zafrul Tengku Abdul Aziz said the management is happy with the bank’s size and scale, which does not warrant any M&A.

“As a group, we operate in 15 different countries. Of which, there would be countries where we are up-scaled.

“We would only consider and explore opportunities for M&A with other financial institution depending on the commercial liabilities of that particular country where there are significant growth potentials,” he told reporters at the CIMB Finance Forum 2017 on Belt and Road Initiatives (BRI) in Kuala Lumpur yesterday.

Tengku Zafrul said the group is also focusing on Vietnam and the Philippines for their booming prospects that

would be ideal for expansion. “We are now finalising the opening of our second branch in Vietnam after we began operations there in December. As for the Philippines, we are waiting for approval from the country’s central bank to set up our footprint there.

“But of course we would continue to focus on our core marketplace, which include Malaysia, Indonesia, Singapore and especially in Thailand,” he said.

The banking group is also finalising its recent deal with China Galaxy Securities Co Ltd to acquire CIMB’s 50% stockbroking business, which is expected to be completed by the year-end.

“We are now waiting for the  approvals from all the regulatory authorities as it involves many countries,” Tengku Zafrul added.

He said the deal with China Galaxy is the first step towards partnering with more China-based firms for growth prospects amid the influx of investments between China and South-East Asia.

“Of course, we want to be apart of this growth area and we are constantly looking for other opportunities to increase the collaboration with more China-based companies,” he said.

Meanwhile, Tengku Zafrul is cautiously optimistic about the prospect of the banking sector that has been projected to see an upward trend on the back of strong gross domestic product (GDP) of 5.6% recorded in the first-quarter of 2017.

“Obviously the growth rates of financial institutions are highly dependent on the performance in the country, which has a very strong correlation with its GDP growth.

“We are confident for the banking industry to perform relatively well for the first-half of 2018,” he added.

Despite Malaysia’s positive economic indicators, Tengku Zafrul said the overall economy remains volatile due to uncertainties such as foreign-exchange policy, geopolitical factors, as well as microeconomic market conditions.

“As everyone is well aware of, Malaysia is a highly open economy, therefore we need to be mindful of the US, China, and Europe’s performance in order to maintain positive market movement,” he said.

Yesterday’s forum, with the theme “Opportunities for Malaysia and China entrepreneurs under the BRI”, was a collaboration between CIMB and Tsinghua University People’s Bank of China School of Finance.

It was also witnessed and officiated by Minister in the Prime Minister’s Department Datuk Seri Dr Wee Ka Siong.