CIMB- Entry into Indonesia
WRITTEN BY ANUAR, A.Z, HARBAN, A.A., KOH, E., ROBBEN, G., & EDITED BY SEOW KIAN TAN
CIMB Group is Malaysia’s second largest financial services provider. It is listed on Bursa Malaysia through Bumiputra-Commerce Holdings Berhad (BCHB). In 2004, the CIMB Group began the process of creating a strong and competitive universal bank anchored by Commerce International Merchant Bankers (CIMB), Malaysia’s largest investment bank. In line with CIMB's forward thinking philosophy, CIMB has acquired stakes in international banks and these subsidiaries have been integrated into the CIMB Group making the CIMB Group the leader in investment banking in Southeast Asia.
The majority stakeholder (28.39%) of the CIMB Group is Khazanah Nasional, which is the investment holding arm of the Malaysian Government. Khazanah Nasional also owns a stake in CIMB-Niaga (Khazanah Nasional Berhad, 2010). In just 2 years, CIMB transformed itself from Malaysia’s no. 1 investment bank into a regional universal banking group. CIMB has grown from staff strength of 1,000 in Malaysia to 20,000 in 12 countries while market capitalization has increased from RM6.3 billion to RM19.5 billion. The Group’s total assets grew from RM14.7 billion to RM155 billion with a further RM18 billion being third party funds under management (CIMB, 2010).
Objectives and Philosophy
CIMB’s objective is to create value by serving the needs of its clients, and doing this with integrity (Anonymous, Personal communication, September 15th 2010), CIMB's primary focus is its customers. CIMB strives to attain world-class standards in terms of service levels, cost and productivity. CIMB’s focus is on improving quality and efficiency of its products and services.
CIMB has served its customers under one primary philosophy: serving customers by thinking forward. Looking and planning ahead, innovating new methods and solutions, anticipating and seeing future needs and hidden opportunities before others are aware of them. The CIMB Group calls this Forward Banking (Anonymous, Personal communication, September 15th 2010). Besides that, honesty and transparency are the core values practiced by the CIMB Group. Their always put first the interests of their clients.
Strengths of CIMB
CIMB offers a wide array of products and services that cater towards all segments of the South East Asian market. This diversification is a strength which would propel CIMB forward as CIMB can now offer its customers a larger selection of options in investing, which in turn would increase CIMB’s profits (Anonymous, personal communication, September 15th 2010). Additionally, CIMB possesses core competency in offering Islamic banking services, and CIMB Islamic Bank has been recognized as the “Best Provider of Islamic Financial Services in Asia” by Euromoney, in the Islamic Financial Awards, 2004 (CIMB Islamic, 2010). This award propelled CIMB Islamic Bank to the international forefront. CIMB Islamic Bank also leads the market in terms of size and experience as it employs over 100 Islamic Investment bankers and specialists (CIMB Islamic, 2010). CIMB’s policy of Forward Banking, has also proven to be one of the best means to serve customers and create value (CIMB, 2010). CIMB has further strengthened its position in the market through the acquisition of SBB Asset Management Sdn. Bhd. and SBB Mutual Sdn. Bhd, which provide CIMB with additional investment management skills (CIMB Wealth Advisors, 2010). The mergers and acquisitions of international companies like Bank Niaga and Bank Thai, increase foreign recognition of the CIMB brand and potentially revenue. This was demonstrated by the increase in CIMB’s revenue after the integration of CIMB-Niaga into the CIMB Group in 2002 (CIMB Niaga, 2009b). Finally, by virtue of being owned by Khazanah Nasional (a Government linked company), CIMB is ensured stability and support from the Malaysian Government in times of...
References: Anonymous (2009). "Research and Markets; Indonesia - Telecoms, Mobile, Broadband and Forecasts Report: Comprehensive Overview of the Latest Trends and Developments". Network weekly news (1944-253X), p. 48.
Asiamoney. (2003). CIMB aims to be a prominent global player in Islamic finance. Asiamoney. Vol. 14
Australian Department of Foreign Affairs and Trade
Business Monitor International. (2010). Indonesia Commercial Banking Report Q3 2010. London: Business Monitor International Ltd
CIMB Group. (2007). Press Release 2007. Retrieved September 10th, 2010, from http://www.cimb.com/index.php?ch=group_ch_acg&pg=group_pg_acg_nr&ac=1254&tpt=cimb_group&nr_year=2007
CIMB Group. (n.d.b) Our Business. Retrieved September 10th, 2010, from http://www.cimb.com/index.php?ch=group_ch_acg&pg=group_pg_acg_nr&ac=1254&action=mail2friend&tpt=cimb_group&year=
CIMB Islamic. (2010). About CIMB Islamic. Retrieved September 19th, 2010, from http://www.cimbislamic.com/index.php?ch=islam_about_profile&tpt=islamic
CIMB Niaga. (2009a). Merger closing report. Retrieved September 7th, 2010, from http://www.cimb.com/pdf/IR/Niaga%20Merger%20Closing%20Report%20Nov09.pdf
CIMB Wealth Advisors. (2010). CIMB Wealth Advisors: Company Profile. Retrieved September 19th, 2010, from http://www.cwealthadvisors.com.my/list_article.aspx?catID=6&ddlID=190
Economist. (2010). Asia: Arrest of a smiling extremist; Terrorism in Indonesia. The Economist. Retrieved from: http://www.economist.com/node/16793049?story_id=16793049&fsrc=rss
Leah and Chris. (2005). CIMB looks to regional expansion. Euromoney. Vol. 36, No. 431
Onada, (2010). Historical Exchange Rates. Retrieved September 7th, 2010, from http://www.oanda.com/currency/historical-rates
Oxford Business Group
Price Waterhouse Cooper, (2010) Investment prospects in the Indonesian banking sector. Retrieved September 6th, 2010, from http://www.pwc.com/gx/en/financial-services/indonesian-banking-sector-investment-prospects.jhtml
Shiraishi, T. (2005). Politics in Indonesia: Current State and Future Outlook. Asia-Pacific revie. Vol. 12, No. 1
World Fact Book (2010) Indonesia
Wright, Chris (2008). Islamic finance: Indonesia makes Shariah funding breakthrough. Euromoney.
Please join StudyMode to read the full document