CIMB says ‘good time’ to invest in battered Indonesia, seeks M&A
The Malaysian lender is looking at various assets that would complement its existing business
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[KUALA LUMPUR] CIMB Group Holdings, Malaysia’s second-biggest bank, says it is seeking merger and acquisition opportunities in neighbouring Indonesia despite a slump in investor confidence in South-east Asia’s biggest economy.
“For investors who see long-term potential in Indonesia, certainly it is a good time to come in,” CIMB’s chief executive officer Novan Amirudin said in a Bloomberg TV interview in Kuala Lumpur with Haslinda Amin. The bank remains “fully committed” to the market.
CIMB’s confidence comes as Indonesia struggles to win back investors worried by President Prabowo Subianto’s populist and interventionist agenda, especially as the conflict in the Middle East drives up the cost of fuel subsidies. Indonesia’s rupiah has slumped more than 8 per cent this year to become Asia’s worst-performing currency. The benchmark stock index has dropped 35 per cent, though it gained on Tuesday (Jun 9).
The Malaysian lender, which operates CIMB Niaga in Indonesia, is looking at various assets that would complement its existing business, with wealth among those areas, Novan said.
“We would also look at maybe certain specialised areas that we currently do not have,” Novan said.
CIMB was among the shortlisted bidders for HSBC Holdings’s retail and wealth assets in Indonesia, Bloomberg News reported last month. OCBC substantially outbid its rivals to allow it to enter talks to finalise a deal.
Malaysia’s largest lender Malayan Banking also said it expects its Indonesian operations to be a big contributor to the group’s business in the medium to long-term. Indonesia’s economy remains in growth mode, Khairussaleh Ramli, president and group CEO said in a separate interview.
Still, Khairussaleh acknowledged the complications on the ground, saying the bank is focusing on trying to see how “it can still serve our customers there, but, you know, understanding the challenges that are being faced.” Indonesia currently accounts for about 5 per cent of Maybank’s profit, and any impact will not be major, he said. BLOOMBERG
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