Awards for Excellence 2012: CIMB plays well by following the book
CEO wins Euromoney’s Asian outstanding contribution award
Dato’ Sri Nazir Razak, group chief executive of Malaysia’s CIMB, recently launched a book that is billed as the first-ever fantasy horror novel to be written and published in Asia.
Midnight Walking, written by 17-year-old Kathryn Chua, tells the tale of Lucy Pine, a normal teenager who finds herself caring for a crow when it smashes into her window one night. The crow turns out not to be a crow at all but a sinister being known as Cyrus whose main claim to fame seems to be an ability to drain the soul.
When he is not launching such petrifying-sounding books (his presence at the launch was in fact part of a wider effort to encourage a reading culture among young people), Razak has busily been spearheading a bank that has become the runaway success story of southeast Asian financial markets.
CIMB struck a transformational deal in March as it signed an agreement to acquire Royal Bank of Scotland’s Asia-Pacific cash equities and investment banking business for $118 million. The deal is perhaps the clearest indication yet that domestic banks across Asia are well capitalized and keen to snap up the assets of ailing companies from the developed world. The deal, which is subject to regulatory approval, turns CIMB into the largest investment bank in the Asia-Pacific, ex-Japan region.
Following the signing of the deal, the bank announced that it would exclude the India operations of RBS from the purchase because of what it described as an "unexpected legal issue". Razak says the bank remains committed to adding an Indian component to its Asia Pacific investment banking platform, saying he viewed the exclusion of India from the deal as simply a temporary delay to its India plans.
Outstanding contribution: Nazir Razak, group chief executive of CIMB, with Euromoney’s editor Clive Horwood (l) and Asia editor Anuj Gangahar
CIMB’s fortunes are obviously tied closely to those of its core markets, and its strategy is an implicit bullish call on southeast Asia. It remains to be seen if this regional gamble will pay off. Razak is the youngest son of Malaysia’s second prime minister, Tun Abdul Razak, and the brother of the sixth and current prime minister, Najib Razak. He cuts a youthful figure and has an easy and playful charm as he receives this year’s Euromoney award for outstanding contribution to financial markets in Asia.
Primarily UK educated, Razak obtained a BSc in economics and politics from Bristol and an MPhil in development economics from Cambridge.
After university, he joined the corporate advisory department of Commerce International Merchant Bankers Berhad. He rose to become chief executive of the bank in 1999. He assumed the position of group managing director and chief executive of CIMB in November 2006.
CIMB describes itself as a regional universal bank and its focus is on the high-growth economies of the Asean region. Its core markets are Malaysia, Indonesia, Singapore and Thailand, and in all these areas it is organized into the areas of consumer banking, wholesale banking – comprising investment and corporate banking – treasury markets and group strategy and strategic investments. CIMB has embraced the partnership approach to getting business done in Asia and has formed alliances with Aviva, Bank of Tokyo Mitsubishi UFJ, Standard Bank and Daewoo Securities among others. The bank traces its roots back to 1924 and the establishment of the Bian Chiang Bank in Kuching, Sarawak, Malaysia.
Over the past year, the bank has reinforced its credentials by posting strong growth across the board in deposits, mortgages, personal financing, wealth management, credit cards and several other areas.
Razak has demonstrated his determination to make CIMB a strong player across the region, notably with the RBS acquisition banking business. The outstanding achievement award was given for his establishment of a quality franchise, his strategic vision, strong leadership and work on market structure, as well the bank’s support of wider regional social and development efforts. An example of the latter is CIMB’s backing of efforts to foster talent across a broad range of areas. It recently announced that it is offering full scholarships to outstanding individuals from southeast Asia to pursue full-time postgraduate studies in the fields of genetics and nutrition at the world’s top universities.
The group’s financial performance has been strong amid choppy market conditions. In its most recent earnings release, the CIMB Group reported 10.3% year-on-year growth in first-quarter net profits. Razak said the company had maintained its moderate growth momentum, with total assets and net loans increasing by 14% and 12% respectively. Late last month the bank successfully launched and priced a $350 million five-year senior unsecured notes issuance under its $1 billion euro-medium-term note programme established last year. The notes were priced at a spread of 190 basis points over five-year US treasuries, equivalent to a yield of 2.505% a year with a coupon of 2.375%. The bank says the offering met with demand from a wide range of investors and was allocated to a global mix of asset managers, private banks and financial institutions. Asian investors accounted for 86% of the allocation, with the remainder going to European accounts.
Razak said the strong response to the offering reflects the confidence of the global investment community in CIMB’s credit profile and liquidity position. "This deal also shows that the market environment remains very conducive for corporate issuers, including banks, in this region to tap the fixed-income markets."
Razak clearly has CIMB on a sound footing and he will hope to avoid any horror stories in the future – unless he is reading or launching them as a book.