CIMB to open 3 overseas branches this year

KUALA LUMPUR: CIMB Group Holdings Bhd will open new bank branches in Hong Kong and China (Shanghai) by June this year, with its sights still on Philippines and Vietnam as well.
The Laos branch, which is expected to open in the second quarter of 2014, will be set up by CIMB Thai.
The bank has had a representative office in Shanghai for the last three years and a presence in Hong Kong through CIMB Securities (HK) Ltd.
"It's a long term plan to build a banking presence in Shanghai. The game is not to compete with the local banks but a branch that help us to follow our customers into Shanghai," CIMB Group chief executive Datuk Seri Nazir Razak told a press conference after the group's AGM here yesterday.
"As it stands, one of the biggest growth areas for us in 2013 has been providing renminbi financing for Singapore small and medium enterprises and that has been a successful focus area for us and we want to widen that capability with this presence in Shanghai and a new branch presence in Hong Kong," said Nazir.
The establishment of a representative office is the pre-requisite for a foreign financial institution to operate a branch in China. It also needs to be profitable during the same time frame before the branch can undertake renminbi transactions.
Nazir also said that CIMB is "actively looking" at opportunities in the Philippines, and is trying to obtain its banking licence in Vietnam.
"We're keen to go to the Philippines but it has to be the right opportunity, the right fit. If there isn't something suitable in 2018, we still won't be in the Philippines," he said.
Nazir expects Malaysia's profit contribution to the group to reduce to below 50% in the next three to four years, from 61% in 2013.
"In terms of profit contribution, Malaysia's contribution went up in 2013 because of slower growth in Indonesia. Over time, I still see Malaysia progressively reducing its contribution to the group," said Nazir.
CIMB Niaga president director and CEO Arwin Rasyid said its Indonesian operation is aiming a loan growth that is closer to the industry's average of 14% to 18% this year, compared with 8% last year.
"Indonesia's growth slowed down in 2013 with the business and operating environment but this is a near-term slowdown. In the longer term, the high growth trajectory remains in Indonesia," said Nazir.
Meanwhile, Nazir urged the Malaysian government, which is taking on chairmanship of Asean Economic Community (AEC) in 2015, to take extra steps to help businesses prepare by making tariff barrier terms clear by Dec 31, 2015.
"The plea here is that businesses need to plan. We need clarity in terms of what there would be on Dec 31, 2015. If that doesn't happen, there's a danger that we'd all get dressed up for the wrong occasion," said Nazir.
Adding that CIMB is geared for AEC, he said the bank performed 73 cross-border transactions for corporate clients in 2013 compared with 30 in 2012.
"It's becoming an obvious differentiator that CIMB is well positioned to help companies or businesses go cross border," he said.