CIMB’s dual listing in Thailand expected by Q4

CIMB Group Holdings Bhd, the country’s second largest lender by assets, expects its dual listing in Thailand to take place by the fourth quarter of this year (Q4), said its group chief executive Datuk Seri Nazir Razak.

He said CIMB is always keen in a dual listing on the Stock Exchange of Thailand (SET) and is still in discussions with the regulators there.

“It’s important that we iron out all the details (with the Thai regulators). If those details land in the way that we’re comfortable with, we’ll proceed with the dual listing in Thailand,” he told a press conference after the group’s AGM here yesterday.

CIMB has expressed its interest to list on SET since 2010.

Nazir pointed to the differences in listing rules and regulations in different markets that constitute for the delay.

“(For example,) in Thailand, the bonus issues are classified as ‘dividend’ and therefore are subject to tax. They don’t do bonus issues in Thailand. They only do share splits (and) so, they don’t have the same rules.”

Nazir said the Thai equity market is doing well and in terms of investment banking (IB) business pipeline, there is potential that Thailand could be the most active IB market for CIMB this year.

“Last year, our acquisition of Sicco Securities PCL was timely. It has lifted our market share in stockbroking in Thailand and given us a stronger platform in IB there as well,” Nazir said.

He said by year-end, CIMB will be present in 19 countries, from 17 now.

It expects its Taiwan operations to commence this month and Laos operations, via CIMB Thai, to start in the third quarter of this year, which is pending final regulatory approval.

“With the inclusion of Taiwan, CIMB will be the largest Asia Pacific-based investment bank.

“However, this leadership position is somewhat at risk given the potential merger between Citic Securities Co Ltd and CLSA Asia-Pacific Markets. If they merge by mid-2013, there is a possibility that they could be larger then CIMB,” he added.

Nazir also said when a start-up is established in a new market, it would be loss-making for three years.

He cited CIMB Cambodia, which is expected to break even this year, over a three-year period since is started in 2009 and has increased its branch network to 11 branches today.

Meanwhile, the group is bullish on its Indonesian operations with the faster growth trajectory there compared with Malaysia.

“Last year, (profit) contribution from Indonesia increased 30% while Malaysia saw a growth of 10%. If this continues, Indonesia will be the growing contributor to the group as a whole, relative to Malaysia.

“It may not be so long before Indonesia may contribute even more than Malaysia to the group’s earnings,” said Nazir.

He added that this year, the group’s target is to achieve a return on equity (ROE) of 16%.
“If we assume that the group’s capital base grows, that will translate into high single-digit or early double-digit year-on-year growth, based on the ROE target.”

PT Bank CIMB Niaga Tbk president director Arwin Rasyid said the Indonesian government’s target of achieving a gross domestic product growth of 6.5% in 2013 bodes well for Indonesian banks, especially for CIMB Niaga, which is the fifth largest bank in Indonesia.

CIMB Niaga has 1,000 branches now, including microfinance outlets.

“We will grow our branches but we don’t intend to accelerate the growth. Our strategy in Indonesia with regards to our network is to put more emphasis on digital banking, offering alternative choice to our customers by way of internet banking, mobile banking and phone banking,” said Arwin.

Meanwhile, Nazir said the Economic Transformation Programme, which was set up by the Barisan Nasional government, has been well articulated and well received by international investors.

“If (the current government is) re-elected, we hope to see that transformation agenda continue.”

On whether his position would be impacted if the opposition party gains power following the 13th general election, Nazir said: “I don’t give a thought to it. I became chief executive (of CIMB) in 1999. I don’t think that has anything to do with Datuk Seri Najib Abdul Razak (who is Nazir’s brother) being the prime minister.”

He said only three factors will determine his position in CIMB: the board, the regulators and himself.