CIMB, Southeast Asia’s top-ranked investment bank over the past three years, is riding the crest of a wave following its acquisition of some of Royal Bank of Scotland operations in Asia.
It played a major role in Felda Global Ventures’ IPO which raised US$3.3 billion last month. CIMB, Maybank and Morgan Stanley were the joint bookrunners for the Felda I.P.O. while the same three plus Deutsche Bank and JPMorgan Chase were the underwriters for the retail offering.
It is the IPO manager for the Asian hospital operator IHH Healthcare which plans to go public in Malaysia and Singapore, aiming to raise as much as US $2 billion.
As the M’sian government is the ultimate controlling shareholder of Felda and IHH, this shows that CIMB’s future is tied to the political status quo in M’sia being maintained. BTW, the CEO’s elder brudder is M’sia’s PM.
The CEO of CIMB was interviewed by FT earlier this week and made no secret of his ambitions for the bank. But he doesn’t plan to make any more mega acquisitions. But he talked big. No link as interview is behind pay wall.
CIMB can now compete with rivals including Goldman Sachs, and JPMorgan Chase for Asia-Pacific deals, chief executive Nazir Razak said in an earlier interview with Bloomberg. CIMB agreed in April to buy most of Edinburgh-based RBS’s investment banking and cash equities businesses in the region for US$142 million.
The acquisition, which initially seemed to be an “audacious” idea, will complete the bank’s operations and help CIMB boost market capitalisation to more than RM100 billion (S$40 billion) by 2015, he said.That’s about 75% more than its current value. It also targets becoming one of the top three South-east Asian banks by assets and return on equity.
But the problem for him and CIMB is that if big brudder loses the coming general election (expected anytime soon), or wins only a narrow majority, the knives will be out for both of them. Fact that his wife has at times spoken out against the government (She spoke out against the government’s spin on a recent major demonstration which she had observed) will not help him.
As he is a very capable CEO, his loss will cripple CIMB’s ambitions.