CIMB looks to regional expansion
Virtually unknown outside its native Malaysia, investment bank Commerce International Merchant Bankers has rapidly consolidated its domestic dominance. Running out of room to grow, the firm is acquiring Singapore stockbroker GK Goh in its first big step to create a regional investment banking force. The ambition is evident and so are the challenges.
THERE IS MUCH about Commerce International Merchant Bankers Berhad, better known as CIMB, that belies its size. Apart from a small acquisition in Indonesia, the investment bank, a subsidiary of local financial conglomerate Commerce Asset Holding Berhad, has no meaningful presence outside Malaysia. Yet it already claims to be southeast Asia's largest investment bank. Its total assets were M$13.26 billion (US$3.49 billion) at the end of 2003 and its market capitalization is almost US$1.25 billion. With that kind of firepower and a dominant local market share in equity and debt issues, it is not surprising that CIMB has started to look abroad for growth.
In January, it announced the acquisition of the stockbroking businesses of Singapore-listed company GK Goh Holdings for S$239 million (US$145 million). Despite the move and CIMB's dominance in Malaysia, Dato' Nazir Razak, the firm's CEO (pictured), claims that the deal is more relevant to CIMB's future development strategy than evidence of an immediate need to expand. "One of my central arguments," he says, "is that the growth of the capital markets at the expense of the banking market is a strong story in Malaysia and we are still enjoying very strong growth from that.