Kuala
Lumpur. CIMB Group Holdings, Malaysia’s
second-largest lender after Maybank, predicts that in three years, Indonesia’s
contribution of profit before tax will beat Malaysia’s, its home base. CIMB
also affirmed its plan for a dual listing on the Indonesia Stock Exchange,
though currently it is only listed on Bursa Malaysia.
“By
2015, Malaysia will be just under 40 percent, Indonesia will be just over 40
percent, that’s my expectation today,” CIMB Group chief executive Nazir Razak
told reporters from Indonesia including the Jakarta Globe, who were invited by
CIMB Group to Kuala Lumpur, on Thursday.
Nazir
was speaking on the sidelines of CIMB Asean Conference 2012, at the end of a
two-day forum that invited executives from various financial companies in
Southeast Asia. The forum discussed the role of private sector in the region to
drive the economic integration in 10-member countries of the Southeast Asian
Nations (Asean).
Nazir
said he wanted CIMB Group to be the first company, legally incorporated outside
Indonesia, that would list its stocks at the Indonesia Stock Exchange. “That is
once the rule is out,” he said, adding he “really urges Bapepam [the Indonesian
capital markets regulator] to come up with new rules. The sooner the better.”
Under
existing Indonesian regulation, companies that are legally incorporated outside
Indonesia are not allowed to list their shares on Indonesia’s exchange. On the
other hand, Indonesian companies are not prohibited from listing in overseas
markets. Aneka Tambang, the country’s state gold producer, has its shares also
listed on Australia’s stock exchange.
A plan
to allow foreign companies to list in Indonesia has been delayed for around two
years due to legal barriers and accounting matters.
The
Malaysian bank’s operation in Indonesia has been flourishing, boosted by its
subsidiary Bank CIMB Niaga, the fifth-largest lender in Indonesia, which in the
first quarter contributed 32 percent to CIMB Group’s total profit before tax,
or equivalent to RM 431 million ($135 million).
The
lender’s operation in Malaysia contributed 57 percent during the same
January-March period and other countries 11 percent. CIMB Group’s net income
before tax was RM 1.34 billion in the first quarter. A diverged earning sources
was part of the bank’s aspiration to tap into the fast growing development in
the region.
“CIMB
is clearly today the most Asean company there is, in terms of earning
complexion, in term of management staff integration,” Nazir claimed, adding
that the lender also aims to list on the Stock Exchange of Thailand. Indonesia
and Thailand are the two biggest economies in Southeast Asia.
In
regards to the conference theme, Nazir called on the central banks in the
region to synchronize banking regulations.
“There
are no such thing as Asean when you go to the central banks today. Asean means
nothing. It’s either local bank or foreign bank. This is my big grief,” he
said.
The
region is moving into an integrated economic community in 2015 that will allow
free movement of goods service and people within the countries.
“Banks
are the fuel for that to happen, so this framework is very crucial. We should
have had this five years ago,” he said.
Nazir’s
comments echoed Bank Mandiri’s frustration to open branches in other Asean
countries such as in Malaysia
and
Singapore. Zulkifli Zaini, Bank Mandiri’s president director, reiterated his
frustration with neighboring countries for not giving Indonesian banks the same
flexibility given to foreign banks operating in Indonesia, especially with
regard to licensing.
Indonesia’s
central bank currently allows foreign lenders to operate on a single license.
For example, an overseas bank that operates as a commercial lender must get
approval from the central bank, Bank Indonesia, for another license for
micro-lending.
“In
Indonesia, we think it’s not fair. There should be reciprocity,” he said in a
conference on Wednesday. Bank Mandiri aims to be among the top five banks in
Asean by 2014, in terms of market value.
Analysts
said the banks’ eagerness to conquer the region is reasonable given its shining
economic growth and young population, at a time when Europe is embroiled in
debt crisis and the US economy is slowing.
The entire population of the Asean region is now close to 600 million
and the average income per capita is around $3,100 per year.
Dion
Bisara |
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