KUALA LUMPUR, April 2 — CIMB Bank strengthened its regional footprint today when it acquired most of the Asia Pacific cash equities and associated investment banking businesses of the Royal Bank of Scotland (RBS), becoming the largest investment banking franchise in Asia outside Japan.
The addition of the RBS units will mean that, upon regulatory approvals, CIMB will have new on-shore presence in Taiwan and Australia, as well substantially enlarged operations in Hong Kong, India and China.
RBS decided not to sell its Korean entities and CIMB said that it will seek to set up new operations in Korea soon instead.
“This deal decisively transforms CIMB into an Asia Pacific investment bank,” said CIMB in a statement announcing the deal this afternoon.
The deal will see CIMB paying RBS a gross amount of approximately RM431.8 million and injecting a further RM417.6 million of new capital into various operating entities.
“This is an excellent opportunity to complete the build-up of our capabilities in Asia Pacific markets, and to do it quicker and less expensively than if we grew organically,” said Dato’ Sri Nazir Razak, Group Chief Executive, CIMB Group said in the statement.
CIMB’s regional aspirations will face stiff competition from Singapore’s DBS Bank, which received the nod from regulators to start talks to acquire a stake in Alliance Finance Group, Malaysia’s smallest lender, and bought a controlling stake in Indonesia’s Bank Danamon all on the same day.
DBS Bank is Southeast Asia’s largest bank by assets and has stated its intention to become Asia’s bank of choice.
“I have said before that this won’t be the Asian Century without Asian companies rising to the occasion,” said Nazir. “CIMB is not only stepping up, but also placing itself in a superb position to assist other companies in Asia to move across borders.”
RBS is 83 per cent owned by the British government and the sale of assets to Malaysia’s No.2 bank is seen as a move to help it regain its financial strength after it was bailed out in the 2008 Global Financial Crisis.
Nazir said that he is expecting between 350 and 400 RBS staff to join CIMB.
Among them is Matthew Kirkby, head of global banking Asia Pacific for RBS, who said in a statement that: “We look forward to joining CIMB with a sense of enthusiasm and optimism.”