CIMB-Principal Positive on Bonds with New Fund | 24 January 2011 | Kuala Lumpur: CIMB-Principal Asset Management Berhad (“CIMB-Principal”) today launched the CIMB-Principal Strategic Income Bond Fund (“the Fund”), a fund that allows investors to capitalise on Asia, Australia, New Zealand and the Middle East’s improving credit conditions given the high potential of more rating upgrades.

Campbell Tupling, Chief Executive of CIMB-Principal Asset Management said, “The demand for high-quality bonds in Asia, Australia, New Zealand and Middle East continues to remain high given the low interest rates outlook in the US and Europe, and this should support bond prices for the next few years. In addition, the slower economic recovery of these developed markets is shifting investment appetite to Asia. Combined with the likelihood of bond rating upgrades, this will mean potential good returns for investors who want to invest in regional high growth prospects in a stable manner.”

Post-financial crisis, bonds remain the preferred asset class for more conservative investors because it is less volatile than equities. Asia, for example, remains a sound investment destination with rapid urbanisation, as a younger and higher population growth will necessitate greater infrastructure spending in the coming years. This provides the golden opportunity to profit from the economic power of Asia, Australia, New Zealand and the Middle East.

“By taking a three year buy-and-hold strategy, the Fund is buffered from interest rate fluctuations. This means returns will be predictable and in addition to potentially higher than that of cash deposits. We believe that there are many investors who are concerned that the rate of inflation is rising faster than the value of their cash deposits,” Tupling added.

CIMB-Principal Strategic Income Bond Fund will invest between 70% to 98% of the Fund’s net asset value (NAV) in a diversified portfolio of bonds and other fixed and floating rate securities issued by governments, government agencies, supranational organisations and corporate issuers. The Fund may also invest in high-yield securities subject to a maximum of 40% of its NAV. High-yield securities are securities rated below Baa by Moody’s or equivalently rated by S&P or Fitch.

With a minimum subscription of RM5,000, the Fund has an approved fund size of 100 million units which is priced at RM1.00 per unit during the initial offer period. Distributed by CIMB Bank, CIMB Private Banking, CIMB Investment-Retail Equities, CWA and Citibank, the Fund is available for subscription until 9 March 2011. |

http://www.cimb.com/index.php?ch=g2_mc&pg=g2_mc_news&ac=8&tpt=cimb_group

CIMB Bank seals a deal with MATTA in providing foreign currency exchange service for travellers
04 August 2011
Kuala Lumpur: CIMB Bank today has signed a memorandum of understanding (MOU) with the Malaysian Association of Tour and Travel Agents (MATTA) in providing foreign currency exchange services for travellers, named Pick & Pack Currency Service. Endorsed by MATTA, travel agents registered with the Association can now sign up and become CIMB Bank authorised agents to provide foreign currency exchange services to their customers.
A ceremony was held earlier this morning to commemorate the agreement. Signing on behalf of the Bank was Abdul Karim Md. Lassim, Deputy Head, Retail Financial Services, CIMB Bank and Dato’ Mohd Khalid Harun, President of MATTA.
Commenting on the MOU sealed today, Karim said, “We are pleased to collaborate with MATTA in being the first bank to come up with such an innovative service. With 29 foreign currencies available to be exchanged at competitive rates, this service is designed for travel agents to be a one-stop tour and travel centre in providing a convenient, hassle-free and secured delivery service to fulfill their customers’ travelling needs.“
Meanwhile, Dato’ Mohd Khalid said, “At MATTA, we have strict guidelines to ensure that the products and services we endorsed and has gone through a vetting process that eventually provide a win-win situation for both our members and our partners. We are confident that this service will benefit our members’ business, and at the same time providing a convenient service to their customers.”
A CIMB Bank Pick & Pack Centre is established as a dedicated hub located in Jalan Tun Perak, Kuala Lumpur. Travel agents can place their orders via a phone call or fax, and funds transfer can be made to the Centre on behalf of their customers. Foreign currencies can then be sent via a secured delivery service to the travel agent offices.
With this arrangement, travellers will now have the convenience to exchange foreign currencies they need for their destination at the travel agent offices. They have the option to either pick up the foreign currencies directly from the travel agent or alternatively, any CIMB Bureau de Change prior to their departure at these locations - Kuala Lumpur International Airport and the Low Cost Carrier Terminal (LCCT) in Sepang, Penang International Airport, Langkawi International Airport, Kuching International Airport and Kota Kinabalu International Airport.
In addition to enhance this service, CIMB Bank also offer a rate protection guarantee (RPG) that protects customers from loss due to exchange rate volatility, upon returning from their travel. The Bank guarantees a buyback of up to 30 percent of unspent foreign currency at the same rate, subject to a minimum of RM3000 in equivalent of foreign currency. This guarantee is valid for a maximum of 30 days from the date when the receipt is issued. http://www.cimb.com/index.php?ch=g2_mc&pg=g2_mc_news&ac=380&tpt=cimb_group CIMB Niaga’s 1H11 Audited Consolidated Net Profit Reached Rp1.55 Trillion, an Increase of 37% Year-on-Year
Press Release
8 August 2011

JAKARTA. PT Bank CIMB Niaga Tbk (“CIMB Niaga”; IDX: BNGA), today reported an audited consolidated net profit of Rp1.55 trillion for the first six months of 2011, up 37% from Rp1.13 trillion from the same period last year. This translated to earnings per share (EPS) of Rp61.94, higher than the same period last year of Rp47.17. CIMB Niaga’s higher profit was largely driven by an increased in total operating income to Rp4.98 trillion (18%), compared to the same period last year of Rp4.21 trillion.
CIMB Niaga continues to maintain its position as Indonesia’s fifth largest bank by asset size. The bank’s total assets as of 30 June 2011 reached Rp152.71 trillion, up 21% from the corresponding period in 2010 of Rp126.33 trillion.
CIMB Niaga’s President Director Arwin Rasyid said that the relative stability of the Indonesian economy has helped boost the bank’s lending growth. Loans grew by 27% to Rp116.61 trillion as of 30 June 2011 from Rp91.76 trillion as of 30 June 2010. The loans grew in all business segments, mainly driven by the corporate and commercial sector loan growth of 29% and 26% respectively from the same period last year.
CIMB Niaga will also continue to improve its Islamic lending, micro-financing and rahn service -- the last two products are the latest products developed by CIMB Niaga and have shown great prospects and growth opportunities. The management fully supports the development of the micro-financing business by adding new outlets to the Mikro Laju network – increased to 186 as of 30 June 2011 from 35 as of 30 June 2010-- with 534% loan growth. Another new product, rahn, has seen an impressive growth to Rp17.31 billion as of 30 June 2011, albeit relatively small in total number offered. This rahn service can be accessed through 30 outlets.
As loans increased, the bank saw a greater total of third party deposits during this period. The Bank’s third party deposits reached Rp123.46 trillion, a 16% increase from the previous corresponding period last year. CASA (current account savings account) increased to Rp60.15 trillion (29%), while time deposits increased to Rp63.31 trillion (6%).
As of 30 June 2011, CIMB Niaga's loan-deposit ratio (LDR) reached 93.42%, an increase of 793 bps from the corresponding period last year. CIMB Niaga continues to ensure quality of its asset as reflected in its NPL ratio (gross) at 2.69% during the first half of 2011.
Arwin added the Bank’s financial ratios showed improvement during the first half 2011. Return on Asset (ROA) was at 2.86%, 20 bps higher than 2.66% in the same period last year, while Return on Equity (ROE) was also on the rise to 19.69% from 19.10%.
In order to cope with high level of competition in the banking industry, Arwin said, CIMB Niaga will continue to maintain a sound balance between all aspects of the business - corporate, commercial, retail and Islamic banking. “This year we focus more on improving our CASA, high-margin businesses, alternate channels and efficiency. CIMB Niaga has re-launched the Personal Loans product in May and launched the two-wheeler financing through its subsidiary, CIMB Niaga Auto Finance in July,” Arwin added.
Arwin added that the management should however; pay more attention to ways of dealing with increasingly narrowing margins resulting from competition and other factors which include higher rates of interest. “These are conditions that have seen the bank focusing its strategies more on businesses generating fee income and improving low-cost funding as well as on efficiently-run operations,” Arwin said.
Network expansion
CIMB Niaga aggressively expanded its business by consistently adding its channel network – which increased to 845 as of 30 June 2011 from 668 as of 30 June 2010. The Bank also opened a growing number of new Islamic banking units - up to 23 branches as of 30 June 2011 from 12 branches and 1 sub-branch in first half 2010.
To ensure an improving customer services, the Bank had more ATMs installed and operated -- to 1.510 in 1H11 from 1.261 units – to complement its network of 244 self-service terminals (SST).
About CIMB Niaga
CIMB Niaga was established as Bank Niaga in 1955. CIMB Group holds around 97.93% of the stakes in CIMB Niaga. The Bank offers a comprehensive suite of both conventional and Islamic banking products and services, through a expanding delivery channel network of 845 offices all over Indonesia as of 30 June 2011, including 627 branches, 186 Mikro Laju units, and 32 cash/payment points. CIMB Niaga has more than 12.000 professional employees.
CIMB Niaga encourages people to share high growth and take advantage of all the potential that South-East Asia regions bring – in line with CIMB Group’s brand positioning: “ASEAN for You”.
CIMB Group is the second largest financial service provider in Malaysia, and one of Southeast Asia's leading banking business groups. With headquarters in Kuala Lumpur, CIMB Group’s key operations are located in Indonesia, Singapore and Thailand. The Group is the majority shareholder of CIMB Niaga in Indonesia, with single majority shareholding in CIMB Thai in Thailand. CIMB Group is listed on Bursa Malaysia through CIMB Group Holdings Berhad (formerly known as Bumiputra-Commerce Holdings Bhd). The Group has market capitalization of approximately US$22 billion as of 30 June 2011. The group has over 39.000 employees located in 14 countries. http://www.cimbniaga.com/index.php?ch=gen_about&pg=gen_about_news&ac=14&lang=BI Record profit for CIMB

By Adeline Paul Raj
Published: 2011/08/24

KUALA LUMPUR: CIMB Group Holdings Bhd's second-quarter net profit rose by 9.1 per cent to a record but the banking group, the country's second largest, is growing increasingly cautious amid a weakening global economy.

"We have re-strategised for volatile financial markets and slower economic growth in the region," group chief executive Datuk Seri Nazir Razak said at a results briefing here late yesterday.

Net profit came in at RM970 million compared with RM889.5 million in the same quarter a year ago, underpinned by a strong uplift from the Malaysian consumer banking operations and continued high growth at its Indonesian bank, CIMB Niaga.

Revenue came in flat at RM2.96 billion.

Net profit for the first half of the year grew by 9.3 per cent to RM1.9 billion. It is paying out 47 per cent of that to shareholders, having declared an interim net dividend of 12 sen a share.

The group, which has a presence in Indonesia, Singapore and Thailand, is behind its return-on-equity (ROE) target of 17 per cent for the full year. ROE, a measure of overall profitability, came in at an annualised 15.8 per cent at the half-year.

It is nevertheless keeping that target, with Nazir saying it can be achieved by paying more attention on operational efficiencies and sustaining low credit costs.

CIMB is expected later this week to announce a major internal reorganisation, largely involving the streamlining of its investment banking, asset management and treasury operations.

The group expects lower loan growth of 14 per cent to 15 per cent for the full year compared with an earlier projection of 18 per cent. Loan growth stood at 11 per cent for the half year.

Nazir said the group has been taking an increasingly cautious view on the operating environment. "In terms of action, that means maintaining higher liquidity and higher capital levels, being more conservative about risk and more portfolio diversification," he said.

The turmoil in the West, that stems from high debt, is "quite serious", he added.

"If the worst happens and there's a double-dip recession and there's 'bombs' in financial markets, we (Asia) may not be as immune as we were in 2008 (in the previous crisis) simply because the fiscal space is not what it was before.

"And China and India are internally preoccupied, so they may not be able to step up the way they did in 2008," he remarked.

He said the group would turn less cautious if there is a more concrete debt resolution plan in the West, and if there is a sharp drop in crude oil price which could translate to generally lower costs in the US.

Meanwhile, CIMB will continue to keep its eye out for potential acquisitions, but Nazir reiterated that there is currently no plan to revisit buying RHB Capital Bhd.

"That's off the table ... until it's back on," he remarked.

Asked about Indonesia's plan to potentially limit foreign shareholding in its banks to less than 50 per cent, Nazir said CIMB would be "disappointed" if it had to reduce its stake in Bank Niaga given that it had invested heavily in the bank over the years. "We leave it to the judgement of the Indonesian government," he said.

CIMB's net interest income in the second quarter fell by 1 per cent to RM1.66 billion, while non-interest income fell by 4.5 per cent to RM952.3 million.

CIMB bucked the trend among Malaysian banks with its net interest margin (NIM) improving to 3.15 per cent in the second quarter compared with 3.08 per cent in the first quarter.

http://www.btimes.com.my/Current_News/BTIMES/articles/cimbca/Article/index_html#ixzz1dDHMJRCv

CIMB stock hit by growth concerns
By Roziana Hamsawi
Published: 2011/08/26
KUALA LUMPUR: The stock of Malaysia's number two lender took a beating yesterday, closing 4.6 per cent down to a one-year low of RM7.25, on concerns of slower growth this year.

Analysts said as the stock has a lot of foreign owners, it was no surprise that there were more sellers than buyers since Wednesday, despite CIMB Group Holdings Bhd's record second quarter earnings on Tuesday.

"It is similar to Axiata's stock. Axiata also has high foreign shareholding and it suffered the same fate," said one analyst.
The analyst said since CIMB has always commanded a high valua-tion, a slight concern over its performance can easily affect the stock price. |
CIMB's earnings rose 9.1 per cent to a record RM970.01 million in the second quarter ended June 30 2011 from RM889.46 million a year ago.

Despite that, it was considered to be still 9.2 per cent below the consensus of most analysts.

They attributed the sell down of the stock to mostly concerns over slower loans and non-interest income growth.

MIDF Research for one has cut CIMB's earnings forecast for 2011 by 6 per cent due to the low loan growth.

OSK Investment Bank equity capital market head Gan Kim Khoon said CIMB's results were below the expectations of many.

"And there are concerns over its stake in Indonesia's Bank Niaga as CIMB has got more to lose with the new ruling compared to Maybank," he said. | http://www.btimes.com.my/Current_News/BTIMES/articles/simmb/Article/index_html#ixzz1ajvL2YfC Nazir reorganises at CIMB | |
The Edge Malaysia, September 12, 2011By Joyce GohCIMB Group Holdings Bhd has embarked on its biggest reorganization since a restructuring in 2005 gave birth to the second largest banking group in the country.“There is a need to reorganise to be more in line with the needs of the organisation today,” group CEO Datuk Seri Nazir Razak tells The Edge. “We have also taken the opportunity to rationalise some internal structures to strengthen the organisation. It is the biggest reorganisation we have done since 2005.”
After the exercise, CIMB’s group manager committee, led by Nazir, will be trimmed to 15 people from 21 prior to the organisation chart effect on Sept 1.
“There’s a little bit of a change but I don’t want anyone to misinterpret it. As a result of the reorganisation, I will have dual function as group CEO and head of the Malaysian consumer bank. As group CEO, I’ll continue to be involved in investment banking,” Nazir explains.
The exercise will also see CIMB’s group deputy CEO of the investment bank – Datuk Charon Wardini Mokzhani – adding corporate client solutions and asset management to his portfolio. He will also be designated as CEO of CIMB investment Bank Bhd upon obtaining regulatory approvals. Datuk Lee Kok Kwan remains the group deputy CEO but has added corporate banking to his Treasure and markets portfolio.
Kong Sooi Lin, who has been with the banking group since 1994, will become deputy CEO of CIMB Investment Bank upon obtaining regulatory approvals while Kenny Kim will remain group CFO and add strategic investments to his portfolio.
Nazir says the reorganisation is one of the things he had pondered while attending Oxford University’s Centre for Islamic Studies as a Chevening Fellow in the 2010/11 term. “To be honest while I was in the UK, I also took the opportunity to visit banks, look at various structures…there was quite a bit of planning over the past year before arriving at this,” he comments.
The local banking industry is changing with a competitive landscape and challenging global macroeconomic environment keeping banks on their toes. Another reason CIMB is reorganising itself is to keep track of its objective of achieving a return equity (ROE) of 17% this year.
“Our aim is to achieve our ROE target of 17%. But we may not arrive there in the way we thought we would – largely through the top line. We want to arrive there in other ways. This reorganisation will help, but its benefits will come mainly in 2012. Some will come this year but the bulk will come next year,” says Nazir. The banking group posted record quarterly earnings in 2QFY2011 ended June 30 with net profit rising 9.1% y-o-y to RM970.01 million. This was largely due to the strong performance of its Malaysian consumer banking operations and continued high growth at its Indonesian bank CIMB Niaga. Revenue was flat at RM2.96 billion. Net profit in 1HFY2011 rose 9.3% to RM1.9 billion while ROE came in at an annualised 15.8%. Despite the sterling results, Nazir says the group is treading cautiously because of the current unstable global economy. “We are saying we want to be cautious. To be honest with you, the NPLs (non-performing loans) and delinquencies don’t show any stress. But if you become cautions when you see stress, it’s too late,” he points out. |

http://www.ytlcommunity.com/commnews/shownews.asp?newsid=58908&category=featured

CIMB Bank and Facebook Bring Check-in Deals to Malaysia
23 September 2011
Check-in to ‘CIMB-San Francisco Coffee’ on Facebook and get rewarded
Kuala Lumpur: CIMB Bank has tied up with Facebook to offer Check-in Deals. This is a first of its kind offering and marks the first time Check-In Deals are made available in the country.
CIMB Bank and Direct Access credit cardholders who check-in to any ‘CIMB-San Francisco Coffee’ with a yellow ‘deal’ sticker using Facebook Places will get to enjoy a complimentary drink and a chocolate bar with any beverage purchased. There are 16 San Francisco Coffee outlets nationwide, mostly strategically located in central business districts.
“Social media has always been a focus for us and we’re extremely happy to have collaborated with Facebook to bring this innovation to our customers,” said Effendy Shahul Hamid, Head of Group Marketing and Communications, CIMB Group.
“Customer preferences are constantly evolving and it is important for us to evolve our offerings in tandem with that, to bring the best and most relevant products and services to the market,” he added.
Stephen Dolan, Commercial Director, Asia of Facebook commented, “The world has gone social and it is a pleasure to work with brands like CIMB who push the limits of communication and innovation. Facebook is committed to growing the Malaysian market and collaborating with CIMB has enabled us to launch Check-in Deals, which is a first for Malaysia.”
Facebook Places is a feature that allows users to share their current location with their network on Facebook through their mobile device in a few simple steps.
The CIMB-San Francisco Coffee Check-in Deals offer is valid once every 24 hours per user and is available until 5 October 2011. http://www.cimb.com/index.php?ch=g2_mc&pg=g2_mc_news&ac=388&tpt=cimb_group CIMB unit to buy 70pc of Thai broker
Published: 2011/09/30

CIMB Group Holdings is buying a 70 per cent stake in a stockbroking firm in Thailand for RM78.4 million.

CIMB's indirect subsidiary, CIMB Securities International Pte Ltd, will execute the deal with Siam Industrial Credit Public Co Ltd.

SICCO Securities Public Co Ltd (SSEC) is listed on the Stock Exchange of Thailand (SET), and has 13 branches in the country.

The acquisition will trigger a mandatory tender offer for the rest of SSEC's shares. |
It is unclear if CIMB seeks to privatise the stockbroking firm.

"This acquisition strengthens our broking platform on the SET, one of the most attractive markets in Asean. It is expected to at least double our market share and take us further towards our target of being among the top five players in the Thai securities market.

"We will also look for opportunities for synergies between this new platform and CIMB Thai Bank plc," Datuk Charon Wardini Mokhzani, CIMB Investment Bank chief executive officer-designate, said in a statement yesterday.

Read more: CIMB unit to buy 70pc of Thai broker http://www.btimes.com.my/Current_News/BTIMES/articles/cisi/Article/index_html#ixzz1dg5UnFfj

Read more: CIMB unit to buy 70pc of Thai broker http://www.btimes.com.my/Current_News/BTIMES/articles/cisi/Article/index_html#ixzz1dg5NP3qs

Read more: CIMB unit to buy 70pc of Thai broker http://www.btimes.com.my/Current_News/BTIMES/articles/cisi/Article/index_html#ixzz1dg5EUVn3

Felda Said to Pick Morgan Stanley, Maybank, CIMB for IPO

By Chan Tien Hin and Joyce Koh - Oct 24, 2011 6:30 PM GMT+0800
Felda Global Ventures Holdings Sdn., Malaysia’s biggest plantation company, hired Morgan Stanley (MS), CIMB Investment Bank Bhd. and Maybank Investment Bank Bhd. to manage an initial public offering that may raise at least $1 billion, two people with knowledge of the matter said.
The three banks will be joint global coordinators for the Kuala Lumpurlisting, which is scheduled for the first half of next year, the people said, asking not to be identified as the information is private. Deutsche Bank AG and JPMorgan Chase & Co. will be bookrunners on the deal, the people said.
The share sale would be Malaysia’s third-biggest, after offerings by Maxis Bhd. (MAXIS) in 2009 and Petronas Chemicals Group Bhd. (PCHEM) last year, as the government seeks to lure more foreign investors to the country’s stock market by enticing large companies to list.
The listing of Felda Global will create a “blue-chip” and “global conglomerate” that will attract international investors to the Malaysian stock market, Prime Minister Najib Razak said in a speech announcing the share sale on Oct. 7.
Felda Global owns 49 percent of Felda Holdings Bhd., which manages oil and rubber estates for Federal Land Development Authority, a Malaysian government agency. It is also the largest shareholder of MSM Malaysia Holdings Bhd., the Southeast Asian nation’s biggest sugar refiner.
The group also has businesses in the U.S., Canada, Australia, China, Pakistan, Sri Lanka and South Africa, according to its website. Felda Global’s chief executive officer Sabri Ahmad couldn’t immediately be reached to comment.

http://www.bloomberg.com/news/2011-10-24/felda-said-to-pick-morgan-stanley-maybank-cimb-for-ipo.html

CIMB tops Maybank as sukuk arranger

Published: 2011/11/02

CIMB Group Holdings Bhd is poised to overtake Malayan Banking Bhd as the lead arranger for Islamic bonds this year after helping manage Malaysia’s second-biggest offering in 2011.

The lender co-arranged power producer Tenaga Nasional Bhd’s sale of RM4.85 billion (US$1.6 billion) of syariah-compliant debt in conjunction with Kuala Lumpur-based Bank Islam Malaysia Bhd. That offering took the bank’s total to US$4.5 billion, compared with Maybank’s US$3.8 billion, according to data compiled by Bloomberg. Sales of Islamic bonds doubled in October as yields at a seven-week low and the resolution to Europe’s debt crisis encouraged borrowers.

CIMB will focus on attracting Middle East issuers to Malaysia and clinching more deals at home as part of its strategy for 2012, said deputy chief executive officer Lee Kok Kwan.

Maybank’s investment arm said the lender plans to concentrate on markets in Singapore, Indonesia and China.

“The Middle East will continue to be an important market,” Lee said in an interview in Kuala Lumpur yesterday. “We have mandates on hand and will continue to pitch for more deals there.”

Maybank and CIMB, Malaysia’s two-biggest banks, respectively, managed a combined 40 per cent of global sukuk issued this year, data compiled by Bloomberg show. The lenders handled a RM5.9 billion sale from Pengurusan Air SPV Bhd, a state-owned water-asset management company, in June, the biggest domestic offering this year. They were also among four underwriters of the country’s US$2 billion sovereign Islamic bonds in June. -- Bloomberg

http://www.btimes.com.my/articles/20111102144720/Article/#ixzz1dCdgiyXU

Summary
CIMB Group is a regional universal bank operating in high growth economies in ASEAN. CIMB Group has the widest retail branch network across the region and is an indigenous ASEAN investment bank. It operates across ASEAN under several corporate entities, which include CIMB Investment Bank, CIMB Bank, CIMB Islamic, CIMB Niaga, CIMB Securities International and CIMB Thai. CIMB Group’s multi-local business model is organised primarily across the following areas: Consumer Banking, Corporate & Institutional Banking & Markets and Group Asset Management, Insurance & Takaful. CIMB Islamic operates in parallel with these businesses, in line with CIMB Group’s dual banking model. Headquartered in Kuala Lumpur, CIMB Group has presence in 14 countries, covering ASEAN and major global financial centres, as well as countries in which its customers have significant business and investment dealings.
Nowadays, social media is an important tool and the most effective way to promote a company’s products and services. With social media, CIMB can advertise their product in a cheaper and easier way. For example, FACEBOOK is…… CIMB offered ‘Check-in Deals’ with Facebook in Malaysia for the first time. Customers of CIMB Bank and those with Direct Access credit cards will get their reward through check-in to any ‘CIMB-San Francisco Coffee’ with a yellow ‘deal’ sticker. This is a way to stay connect and bring innovation to their customers. This offering shows that CIMB always follow up the trend and gives the best and most relevant products and services to the market. This deal will let more people know about their direct access credit card. People will interest with the credit card based on the benefits offered by CIMB bank. Besides that, as a commerce bank, CIMB also launched a new service which is CIMB’s Pick & Pack Currency Service, where it provide foreign currency exchange services for travellers. Travel agents which registered under MATTA can provide 29 foreign currencies exchange services to their customers by becoming agent of CIMB. CIMB provides delivery service to their agents after they made order. A rate protection guarantee (RPG) is given by CIMB to protect the customers from loss due to the floating of the exchange rate within 30 days. It has the similar concept with derivative products where the price is guaranteed within a period of time. CIMB wish to let the travel agents to provide a convenient, hassle-free and secured delivery service. There will be more people selecting CIMB’s Pick & Pack Currency Service because it is easy and customers will have confidence with the service.
CIMB has launched the CIMB-Principal Strategic Income Bond Fund. The high demand for high-quality bonds given the low interest rates can support bond prices for the next few years. Investors hope to get good return will invest in high growth area. Many conservative investors remain bonds as asset because it is less volatile than equities after financial crisis. The returns of CIMB-Principal Strategic Income Bond Fund (“the Fund”) will be expectable and higher than cash deposits because the fund is buffered from interest rate by taking a three year buy-and-hold strategy.. CIMB-Principal Strategic Income Bond Fund will invest between 70% to 98% of the Fund’s net asset value (NAV) in a diversified portfolio of bonds and high-yield securities. As a conclusion, the Fund aims to provide capital preservation and regular income through investments in mostly bonds and other fixed- and floating-rate securities. (http://www.bloomberg.com/quote/CIMBPSI:MK)
Sukuk is one type of islamic securities which is known as islamic bond. Power producer, Tenaga Nasional Bhd had the second-biggest offering in 2011 with sale of RM4.85 billion. CIMB co-arranged this syariah-compliant debt together with Bank Islam Malaysia Bhd. Bank’s total goes up to US$4.5 billion. CIMB was also among four underwriters of the country’s US$2 billion sovereign Islamic bonds in June. Before being the arranger for Tenaga Nasional Bhd’s offering, Maybank Investment Bank Bhd has overtaken CIMB Islamic Bank Bhd, the country’s top sukuk underwriter for 2010, as the largest arranger of sukuk issuance since the beginning of the year. (http://themalaysianreserve.com/main/index.php?option=com_content&view=article&id=818:maybank-overtakes-cimb-as-top-sukuk-underwriter&catid=36:corporate-malaysia&Itemid=120). But after this, CIMB Group Holdings Bhd is poised to overtake Malayan Banking Bhd as the lead arranger for Islamic bonds this year after helping manage Malaysia’s second-biggest offering in 2011. This will help in maintaining the company’s good profile. Any wise decision in bringing the company to be the top in the country is important.
CIMB Investment Bank Bhd, Maybank Investment Bank Bhd and Morgan Stanley are hired by Malaysia’s biggest plantation company Felda Global Ventures Holdings Sdn in order to handle an initial public offering (IPO),which estimate that may shoot up at least $1 billion. What is all about IPO ? The first sale of stock by a private company to the public. IPOs are often issued by smaller, younger companies seeking the capital to expand, but can also be done by large privately owned companies looking to become publicly traded. In an IPO, the issuer obtains the assistance of an underwriting firm, which helps it determine what type of security to issue (common or preferred), the best offering price and the time to bring it to market. http://www.investopedia.com/terms/i/ipo.asp#ixzz1erhPqPy2. For the Kuala Lumpur listing, CIMB is one of the joint global coordinators. As Prime Minister Najib Razak (Oct, 7 2011) says, “The listing of Felda Global will create a “blue-chip” and “global conglomerate” that will attract international investors to the Malaysian stock market”. The CIMB Investment Bank Sdn Bhd executive director Datuk Charon Wardini Mokhzani have said that before, in the next 1-2 months many companies are ready to launch IPO when there is a improvement in financial markets. Apart from that, intra-Asean trade and investment named it economic integration, could create a highly fairness competitive region that is overall integrated into the global economy, he added. http://www.thesundaily.my/news/175591
CIMB Niaga was established as Bank Niaga in 1955. CIMB Group holds around 97.93% of the stakes in CIMB Niaga. Due to the highly stakes of CIMB Group in CIMB Niaga, the performance of CIMB Niaga will bring a great impact to the bank, where it will influence the yearly net profit of CIMB Group. On 8th August 2011, CIMB Niag reported an audited consolidated net profit of Rp1.55 trillion for the first six months of 2011, increased 37% from Rp1.13 trillion from the same period last year. The position as Indonesia’s fifth largest bank by asset size continues to be taken by CIMB Niaga. The bank’s total assets as of 30 June 2011 reached Rp152.71 trillion, raised 21% from the same period in 2010 of Rp126.33 trillion. The bank’s lending growth has also boosted due to the relative stability of the Indonesian economy . Loans has grew by 27% to Rp116.61 trillion as of 30 June 2011 from Rp91.76 trillion as of 30 June 2010. The loans grew in all business segments, mainly driven by the corporate and commercial sector. CIMB Niaga’s President Director said CIMB Niaga will continue to maintain a balance in all aspects which include corporate, commercial, retail and Islamic banking. Any investment of the group in any region will have direct impact on the group’s profit.
Due to the high growth of CIMB Niaga as we see above and also the strong uplift of consumer banking operations, the recent reported net profit for second-quarter has increased 9.1 per cent to RM970 million compared with RM889.5 million in the same quarter a year ago among a weakening global economy. However, the return-on-equity (ROE) is behind its target of 17 per cent for the full year, and has only annualised 15.8 per cent on the half-year. The loan growth is 11 per cent at the half year. It is expects a lower loan growth of 14 per cent to 15 per cent for the full year compared with an earlier projection of 18 per cent. The high debt that cause the turmoil in the West is quite serious and if a double-dip recession and a ‘bombs’ in financial market happens, Asia will not be as immune as year 2008, as the fiscal space is not what it was before. Looking at the scenario of the West and under expectation of ROE and loan growth, CIMB will take action on maintaining higher liquidity, higher capital levels, more conservative about risk and more portfolio diversification. The group is being cautious in the weak market. Other than that, CIMB will announce a major internal reorganisation, largely involving the streamlining of its investment banking, asset management and treasury operation. It’s target is to achieve the expected ROE of 17 per cent. Regarding Indonesia’s plan to potentially limit foreign shareholding in its bank to less than 50 per cent, Nazir said CIMB would be "disappointed" if it had to reduce its stake in Bank Niaga since it had invested heavily in the bank over the years. If this happened, CIMB, which has a 96% stake in PT Bank CIMB Niaga, will the most affected, as CIMB Niaga contributes close to 30% of group earnings. After the news was out, the share price of CIMB drops heavily, settling 2% or 19 sen lower at RM8.56. (http://www.theedgemalaysia.com/component/content/article/189893.html). As we can see, news is one of the key factor in determining a company’s share price. If it is a good news, the share price will definitely rise whereas if it is a bad one, it will drop.
Following that, CIMB Bank’s share price dropped during 25 August 2011, about 4.6 per cent down to a one-year low of RM7.25. Other than that, CIMB has a foreign ownership of 38.4 per cent and many foreign shareholders were selling the share affect sellers outnumber buyers. (http://www.btimes.com.my/Current_News/BTIMES/articles/NOGROW/Article/index_html#ixzz1ajuWyMqO). This was happened when supply excess than demand in the market and many investors are selling a stock and there aren’t enough buyers, the price will go down. (http://en.wikipedia.org/wiki/Stock). The sell down of the share still happen although CIMB’s earnings raised to RM 970.01 million in the second quarter earnings on 23 August 2011. This was because of low loan growth and no interest growth.
A week later, CIMB group has announced its biggest reorganization since a restructuring in 2005. This is mainly due to the performance of the group that we can see in the recently news. The group’s ROE and loan growth has underperformed although it’s net profit increased. But that was because of the high growth of CIMB Niaga in Indonesia. CIMB’s group manager committee, led by Nazir, will be trimmed to 15 people from 21 prior to the organisation chart effect on Sept 1. As Nazir said, the main purpose of the reorganising is keeping banks on their toes in the competitive landscape and challenging global macroeconomic environment. Besides, CIMB also wish to keep track of its objective of achieving a return of equity (ROE) of 17% this year. As Nazir said, CIMB will always want to be cautious. Although NPLs (non-performing loans) and delinquencies did not show any stress to the group, but it’s always too late to act when you see the stress. This is one of the strategy of the group to maintain their fame’s of second largest bank’s in the country.
On 30 September 2011, CIMB Bank bought a RM 78.4 million in Thailand.This acquisition helped to trigger a mandatory tender offer for the SICCO Securities Public Co. Ltd‘s shares. Besides, the acquisition increased the strength of CIMB’s broking platform on the Stock Exchange of Thailand. It was expected to gain CIMB‘s market price and be the 5 players in the Thai securities market. Subsequently, CIMB rose in Kuala Lumpur trading and the stock climbed 1 percent to RM6.95. (http://www.btimes.com.my/articles/0110930095723 /Article/)
In a nutshell, CIMB group has keen on lauching various new products and services to the market. This will help in attracting more consumers to the bank. Besides, CIMB group is a strong bank in the region. It can still maintain it’s fame of top banks among the country in the volatile and weakening market.One of the resaon is the group has performed the bond’s offering and IPO for large company. The group is also being sensitive to the macroenvironment where it recently have did a major internal reorganization. The strategy of the group is being cautious.

Reference
CIMB-Principal Launches Its First Asia-Pacific Fund For 2011
May 11, 2011
Unit Trust

Kuala Lumpur: CIMB-Principal Asset Management Berhad (“CIMB-Principal”) today launched the CIMB-Principal Asia Pacific Dynamic Income Fund (“the Fund”), which will invest in dividend-yielding stocks from the Asia Pacific (ex-Japan) region. The Fund aims to provide more attractive regular income and returns.
Campbell Tupling, Chief Executive of CIMB-Principal said, “Investors are generally back to being bullish. After two very good years, valuations have recovered and Asia Pacific ex-Japan markets are up. Looking ahead, slower economic recovery of the developed markets will shift investors’ appetite to Asia Pacific and this positive outlook will spur further stable investments. We are confident that markets will perform positively and this Fund will satisfy investors’ revived sentiments and lingering concerns.”
Under general market conditions, the Fund’s investment focus will be on high dividend-yielding equities of companies in the Asia Pacific ex-Japan region, which the fund manager believes offer attractive yields and sustainable dividend payments and will exhibit above-average growth potentials than its industry or the overall market. The Fund may also invest in companies with growth stories which the fund manager foresees to adopt a strong dividend payout policy.
The Fund is an equity income and growth fund with a target return of eight percent (8%) per annum over the medium to long term. It aims to provide consistent returns as it invests in higher dividend-yielding companies which are generally more established and credit-worthy. These companies have solid fundamentals, with strong corporate governance and balance sheets.
“We believe this is an achievable target even after the crisis in 2008. The demand for Asia Pacific ex Japan equities is on the rise, with continued rapid urbanisation and accompanying infrastructure build up in the next few years. Its robust economies are encouraging domestic consumption that have fueled high gross domestic product (GDP) growth in most Asia Pacific countries, which are higher than that of the US and Europe,” Tupling continued.
Should the market experience excessive volatility, expected prolong declines or other adverse conditions, the Fund’s structure allows its strategy to reallocate from equities to other investment alternatives depending on the fund manager’s assessment. The fund will be managed as an equity fund, however, if markets turn bearish, it will be moved out of equities and reinvested into less volatile assets as part of its risk management strategy.
The Fund has an approved fund size of 600 million units, priced at RM0.25 per unit during the initial offer period. Customers can invest with a minimum subscription of RM1,000, and the Fund is distributed by CIMB Bank, CIMB Private Banking, CIMB Investment-Retail Equities and CWA.

http://unittrustmalaysia.org/index.php/cimb-principal-launches-its-first-asia-pacific-fund-for-2011-3/

Maybank overtakes CIMB as top sukuk underwriter

Monday, 10 October 2011 21:10 Farah Saad

Maybank Investment Bank Bhd has overtaken CIMB Islamic Bank Bhd, the country’s top sukuk underwriter for 2010, as the largest arranger of sukuk issuance since the beginning of the year, but the battle to finish on top is far from over.

With two months left to the end of the year, CIMB Islamic Bank chief executive officer (CEO) Badlisyah Abdul Ghani prefers to focus on quality, not quantity.

"We are comfortable with our deal pipeline this year that will help us close the year as one of the more significant sukuk managers in the global market," he told The Malaysian Reserve...

http://themalaysianreserve.com/main/index.php?option=com_content&view=article&id=818:maybank-overtakes-cimb-as-top-sukuk-underwriter&catid=36:corporate-malaysia&Itemid=120

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Indonesia’s ownership limit casts shadow over M’sian banks
Written by Isabelle Francis
Tuesday, 19 July 2011 11:55 KUALA LUMPUR: Indonesia’s plan to limit foreign ownership in its banks has cast a shadow over financial institutions operating in that region, including the country’s two largest lenders — CIMB Group Holdings Bhd and Malayan Banking Bhd (Maybank).

CIMB, which has a 96% stake in PT Bank CIMB Niaga, was a top loser, settling 2% or 19 sen lower at RM8.56 yesterday, effectively wiping out RM1.41 billion of its market capitalisation. Maybank, which owns 97% of Bank Internasional Indonesia (BII), was five sen lower at RM8.82.

The KL finance index shed over 1% or 153 points to 14,703.91, versus the FBM KLCI, which lost less than 1% or 14 points to 1,562.6.

It was recently reported that Bank Indonesia is looking to limit a single institution’s or an individual’s shareholding in banks to between 40% and 50% by 4Q11.

If this goes through, CIMB would be the most affected as CIMB Niaga contributes close to 30% of group earnings.

JP Morgan estimated in a recent report that a sale of 50% of its stake in CIMB Niaga would impact the banking group’s bottom line by about 8%. It added that based on CIMB Niaga’s value of RM19 billion, the proceeds would amount to 15% of CIMB’s current market capital.

“Taking the RM10 billion as the effective price for the Niaga stake, based on a 19.5% stake bought from Khazanah [Nasional Bhd] last year, the profit from the stake sale comes to 7% of current market cap,” said JP Morgan.

The house said although earnings dilution as a result of the disposal would be almost completely offset by capital gains, it believes the divestment of the CIMB Niaga stake will still be negative for CIMB’s share price.

“We believe the key reason for lower CIMB valuations post the Niaga stake sale will be the lower growth rate for the bank,” it added in a recent note. It noted that CIMB’s fair value declined almost 10% to RM9.30 post the sale from RM10.20 previously.

Meanwhile, CLSA said both CIMB and Maybank will face difficulty in selling down their stakes if the regulation is implemented, given the tight free float and volatility in their respective share prices.

“It may be difficult to find buyers at current prices with the stocks trading at price-to-book (PB) of 2.6 times and 4.3 times respectively,” it added. It also noted that Maybank still faces difficulty in selling its 17% stake in BII currently.

CLSA said the value of the potential divestment is between US$2.3 billion (RM6.95 billion) and US$2.7 billion for CIMB Niaga and from US$1.7 billion to US$2.1 billion for BII based on the current market price.

Be that as it may, the house said the implementation of this restriction could be delayed even if it is approved, given the complexity of the issue. It pointed out that the value of shares to be divested to third parties for listed banks to meet the shareholding limit will put pressure on the market if it has to be done too quickly.

“We estimate the value of bank shares to be divested to meet the shareholding limit to be US$11 billion to US$20 billion, equivalent to 2.6% to 4.7% of total Indonesian market capitalisation,” it added.

CLSA also said the new ruling would potentially throw a spanner in RHB Capital Bhd’s proposal to buy an 80% stake in Bank Mestika. RHB closed three sen lower at RM9 yesterday.

Despite these new regulatory restrictions, CLSA said Indonesia remains attractive given the high return on assets and asset growth of Indonesian banks. It maintained its ‘buy’ call on Maybank and RHB and ‘outperform’ call on CIMB.

All other finance-related stocks were down yesterday, including Alliance Financial Group which ended one sen lower at RM3.53 yesterday. Regardless, HwangDBS said in a recent note AFG stands out due to attractive valuations, coupled with strong earnings visibility.

Meanwhile, it noted that Hong Leong Bank Bhd has outperformed the market and is inching closer to its RM15 target price. Based on its closing price of RM13.44 yesterday, it is trading at a demanding FY June 30, 2012 price-to-earnings (PE) of 14.6 times and FY11 PE of 18 times, making it one of the priciest banking stocks in the market.

This article appeared in The Edge Financial Daily, July 19, 2011.

http://www.theedgemalaysia.com/component/content/article/189893.html