CIMB eyes Philippine Business Bank

PETALING JAYA: CIMB Group Holdings Bhd, which is currently in merger talks with RHB Capital Bhd (RHBCap) and Malaysia Building Society Bhd (MBSB), is reportedly in talks to invest in Philippine Business Bank (PBB), a thrift bank in the Philippines.
CIMB was not available for comment.
The news of its interest in Philippine Business Bank comes just days after another Philippine daily reported that CIMB is eyeing Philippines' Al-Amanah Islamic Investment Bank for between 50 billion pesos and 100 billion pesos.
The sudden influx of news of CIMB's activities in Philippines is premised on CIMB outgoing group chief executive Datuk Seri Nazir Razak's reiteration that it would not be changing its Asean aspirations due to its ambitious merger plans with RHB Cap and MBSB.
Nazir has even gone so far as to say that its plans in Philippines now would have to be reconsidered in line with the new legislation there that allows foreign banks to own a 100% interest in local banks from 60% previously.
Philippines is seen as a key market in Asean, as growth in the country is expected to be one of the highest in South East Asia (SEA) and likely to continue to outperform the average growth of SEA countries.
PBB is led by 'juice king' Alfredo Yao who founded Zest-O Corp with its popular Zest-O brand of beverages in the Philippines.
"Industry sources privy to the discussions confirmed that Yao was interested in taking CIMB as a strategic partner in PBB, similar to how he entered into an airline partnership deal with budget carrier AirAsia," the Philippine Daily Inquirer wrote yesterday.
Yao is the controlling shareholder and former CEO of AirAsia Zest based at the Ninoy Aquino International Airport in Pasay City, Metro Manila in the Philippines. AirAsia Philippines owns 49% of AirAsia Zest.
But the sources said Yao at present would only consider ceding to CIMB a maximum stake of 35% in PBB.
According to the Inquirer, other banking sources said CIMB had also expressed interest in a couple of other banks apart from PBB. It added that the Philippine Bank of Communications (PBCom) has caught the attention of the CIMB but it was earlier reported that retailer Lucio Co had struck a deal to acquire a 37.67% stake in PBCom.
"Although the Philippines has already liberalised the entry of foreign players in the banking system, sources said CIMB still preferred to buy into an existing bank instead of organising a new one from scratch. CIMB is likewise willing to come in as a strategic investor with minority interest, like in the case of PBB where the principal is willing to divest only up to 35%," it said.
PBB, a publicly listed bank, is currently valued by the stock market at 9.91 billion pesos. This market capitalisation suggests that a 35% stake in the bank is worth around 3.5 billion pesos (RM256.67 million).
"A potential entry into PBB as investor may give CIMB a foothold in Philippine consumer and small and medium enterprises banking," said the Inquirer.