News – CIMB transforms from a strong investment bank to universal bank across South-East Asia

Ever wonder how bank become to-big-to-fail (TBTF)? You could only guess where did they get all the money to acquire, merge and operate all those offices in those countries. You need to understand how banks made (easy) money and how tight they control the banking industry, with the help of Central Bank (BNM).  For chronological step on how to be TBTF, read this article below.

 

The bank with operations in Malaysia, Indonesia, Thailand, Singapore, Cambodia and soon the Philippines has the widest geographical reach and the largest number of branches in South-East Asia. It wants to expand into Myanmar, Laos and Vietnam. In doing so, it was trying to accomplish something only done before by the global giants such as HSBC and Standard Chartered, but with a big difference this time around an Asean flavour.

The transformation of CIMB

Seeds of the CIMB Group’s regional expansion started with Commerce Asset buying Bank Niaga in 2002. The Indonesian bank was seen as an standalone asset for which profit growth will flow into income statement of the banking group and nothing more. There was no change in identity or integrated IT systems at that time as Bank Niaga operated independently in its early years.

The regional strategy, however, started to take its form after CIMB, as an investment bank, decided to merge its successful investment banking franchise with the consumer banking operations of Bumiputra Commerce the consumer bank of Commerce Asset and launched a takeover of Southern Bank.

“If you trace back to end of 2004, we faced a few challenges. One was that we had become too successful as an investment bank in Malaysia. Our market shares were very large and we couldn’t grow our market share; we could only lose ground,” he says.

 

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