Cimb Group

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Date Submitted: 09/25/2011 11:08 PM

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In the case of M&A of bank in Malaysia, for example CIMB Group is Malaysia’s second largest financial services provider and one of Southeast Asia’s leading universal banking group. CIMB Group offers a full range of financial products and services, covering corporate, investment banking, consumer banking, treasury, insurance and asset management. (Share Investment, 2011) In June 2005, CIMB acquired Bumiputera Commerce Bank (BCB) following the strategic decision by Commerce-Asset Holdings Bhd (CAHB). It is because they want to create a universal bank and also spread their services to retail banking based on BCB previous business model. As part of the exercise, CAHB was renamed Bumiputra-Commerce Holdings Berhad (BCHB). BCHB has assets and resources that are complementary to CIMB business. Thus, CIMB can have high probabilities of synergy and competitive advantage by maintaining their strength. This acquisition can increase concentration on create a universal bank than what they would tend to do in larger economies. This will lead to more competitive among local banking groups, but also with the large global players. They later on to acquire Southern Bank Berhad (SBB) in March 2006 after few months’ negotiations. CIMB then repackaged the existing investment tool as CIMB-Wealth. Refer to 2006 annual report, ROE on 2005 was recorded as 8.89% while 2006 has increased to 13.98% Return on equity measures the return to common shareholders. It means CIMB has generating profits from every dollar of shareholders’ equity. The total assets of CIMB have improved after acquired BCB and SBB from RM113, 525,964 to RM159, 607,244. The merger combined the resources of BCB and the expertise and agility of SBB.