CIMB to strengthen regional presence

THE country's second largest banking group, CIMB Group Holdings Bhd (1023), has applied for new banking licences in Vietnam and Cambodia in a bid to strengthen its regional presence.

The group already operates in Indonesia, Thailand and Singapore.

"We've applied for new banking licences in Vietnam and Cambodia," group chief executive Datuk Seri Nazir Razak told reporters yesterday when asked if the group planned to expand to other countries.

"That's all for the moment, but CIMB does have strategies for all other Asean markets," he said after formalising an agreement with the Japan Bank for International Cooperation for a US$300 facility (RM984 million) for businesses in the region.
The Malaysian-listed lender, which owns CIMB Thai Bank, has also been eyeing a listing in Thailand and this may happen by mid-June this year, Nazir said.

"The process under the FRS139 accounting standard requires us to announce our first quarter earnings before the submission. That is why the timing is such," he added.

CIMB Thai will remain listed even after the group's dual listing, its chief executive officer Subhak Siwaraksa said.

Nazir also noted that CIMB Group has a strong capital base and would be "comfortable" supplying capital to CIMB Thai and Indonesian banking unit CIMB Niaga if the need arose.

Both units are also capable of funding their growth via bonds, he said.

CIMB Niaga president director Arwin Rasyid said the Indonesian lender planned to sell sub-debt of US$300 million by June to boost capital and pay debt, according to a report yesterday.

CIMB Niaga has US$100 million (RM328 million) of sub-debt maturing this year and US$200 million (RM656 million) next year. The bank is also considering a rights offer, Arwin was reported to have said.

This follows hot on the heels of CIMB Thai's move last week in announcing plans to raise about 9 billion baht (RM910 million) via rights and bonds issues.

Meanwhile, Arwin told reporters in Kuala Lumpur yesterday that he expected CIMB Niaga's loans to expand in the range of 20 per cent or higher this year on the back of strong economic growth in Indonesia. Loans grew 12 per cent last year.

CIMB Niaga is Indonesia's fifth largest lender with 5 per cent market share of loans.