CIMB Group and Principal Financial Group to Realign Ownership Stakes in Joint Ventures Across Southeast Asia
Transaction to result in a gain on disposal of RM950 million and a CET1 ratio uplift of 18 bps to CIMB Group
(Kuala Lumpur, Malaysia) – CIMB Group Holdings Berhad (“CIMB” or “the Group”) today announced that it had signed agreements with the Principal Financial Group (“Principal”) for the latter to increase its ownership in the CIMB-Principal Asset Management Group and CIMB-Principal Islamic Asset Management. The agreements will increase Principal’s stake to 60 percent with CIMB retaining 40 percent ownership in both entities. The joint ventures will continue to be co-managed by both companies.
This transaction is expected to be completed in the second quarter of 2018 and is subject to the relevant regulatory approvals.
“As a leading ASEAN universal bank, asset management continues to be an integral part of our regional banking business. This shareholding realignment will ensure that our asset management joint venture with Principal achieves its maximum potential and continues to sustainably create value for CIMB,” said Tengku Dato’ Sri Zafrul Aziz, Group Chief Executive Officer, CIMB Group. “Scale and extensive investment expertise are important to this business and we believe this strategic realignment will enhance the value proposition of the joint venture to enable us to serve our customers better.”
This exercise will see CIMB Group recording a gain on disposal of approximately RM950 million and will also see its CET1 ratio improve by approximately 18 bps.
“This realignment also allows us to realize attractive gains from our strategic investment in CIMB-Principal, and to continue participating in the joint venture as a 40% shareholder,” added Zafrul.
CIMB and Principal have partnered in the region since 2004 and have successfully grown their operations across Malaysia, Singapore, Indonesia and Thailand. The CIMB-Principal Asset Management group of companies has more than MYR70 billion in AUM and is one of the largest asset managers in the region. CIMB-Principal Islamic Asset Management has been managing Islamic institutional mandates since 2008 and is the sole end-to-end Islamic asset management boutique of the CIMB Group and Principal Financial Group.
About CIMB
CIMB Group is Malaysia’s second largest financial services provider and one of ASEAN’s leading universal banking groups. It offers consumer banking, investment banking, Islamic banking, asset management and insurance products and services. Headquartered in Kuala Lumpur, the Group is now present in nine out of 10 ASEAN nations (Malaysia, Indonesia, Singapore, Thailand, Cambodia, Brunei, Vietnam, Myanmar and Laos). Beyond ASEAN, the Group has market presence in China, Hong Kong, India, Sri Lanka, Korea, the US and UK. CIMB Group has the most extensive retail branch network in ASEAN of over 900 branches as at 30 September 2017. CIMB Group’s investment banking arm is also one of the largest Asia Pacific-based investment banks, offering amongst the most comprehensive research coverage of more than 700 stocks in the region.
CIMB Group operates its business through three main brand entities, CIMB Bank, CIMB Investment Bank and CIMB Islamic. CIMB Group is also the 92.5% shareholder of Bank CIMB Niaga in Indonesia, and 94.1% shareholder of CIMB Thai in Thailand.
CIMB Group is listed on Bursa Malaysia via CIMB Group Holdings Berhad. It had a market capitalisation of approximately RM60.3 billion as at 31 December 2017. The Group has 38,000 employees located in 15 countries.