In achieving the ASEAN Economic Community
(AEC) by 2015, ASEAN was in a very sweet spot geographically, and that the rise
of Asia was inevitable and was a reversion of an 800-year norm, chief executive
of CIMB Group, the indigenous ASEAN investment bank, Nazir Razak said
yesterday.
“There
will be bumps along the road. The integration of ASEAN will bring winners and
losers. The winners will be loud and there will be people who will not be
happy. We will need the political will to carry on with this. It is after all
the coming together of over 600 million people,” said Nazir.
The AEC
emanates from the vision of the ASEAN leaders to transform the region into a
single market and production base that is highly competitive and fully integrated
into the global community by 2015.
Nazir
said that there was currently no ASEAN banking framework (ABF), and it was
imperative to have one soon.
“Right
now there is no framework. Every country still has its own set of rules. It
doesn't mean anything when you tell the regulator of that country that you are
ASEAN. It is still up to the regulators to decide what they want to do.”
Earlier
on, there had been uncertainties on whether CIMB would need to reduce its
holdings in Indonesian bank Bank Niaga, in which it owns 97.9 per cent.
However
recently, reports have indicated that Indonesia's central bank has planned to
limit single ownership in its banks to 40 per cent, but only for new
investments.
“To
reduce our stake in Indonesia would not have been right. That is why it is
imperative to have the ABF soon. The ABF fuels banking and trade. In fact, the
ABF should have been around five years ago. It's better to have it late than
never,” said Nazir.
Nazir
added that CIMB had submitted an application for a stock broking license in
South Korea. If it were to get the license, growth in South Korea would be more
organic, and to support its Asia-Pacific platform. CIMB will not be making
anymore material acquisitions for the time being.
Since
CIMB's acquisition of the Royal Bank of Scotland's (RBS) cash equities and
associated investment banking businesses for 849.4 million ringgit (US$266.81),
CIMB Investment Bank has become the largest Asia-Pacific based investment bank.
Nazir
said that he was very enthusiastic with the synergies that would be created
with the combined entity of CIMB and RBS.
“We
have had 331 staff from RBS accept our offer. So now we will have some 360 RBS
staff. Synergies aside, it is also about the business as usual. Because of what
has happened to them, some of RBS' businesses need to be revived,” Nazir said.
CIMB is
also reviewing the RBS Morgan joint venture, in which RBS holds a 33.3 per cent
stake. RBS Morgan has a staff strength of about 600 people over 200 outlets in
Australia.
“We
have met with the management team in Morgan and we are in negotiations. There
is no specific timeline,” said Nazir.
The
Jakarta Post
Business & Investment Opportunities
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