Malaysian banks are stepping up their expansion plans.
Less than a week after
"We have always been strong here in Southeast Asia. But it comes to our strength outside of Southeast Asia, we find it very hard to compete but this, this is a good step," CIMB Group's chief executive Zafrul Aziz said on CNBC's "Street Signs" on Thursday, two days after signing the deal.
"The synergies are great. We are seeing opportunities with the belt and road initiative that's been announced … With this collaboration we have just formed with China Galaxy, it will facilitate the capital market, we will be there to support Chinese companies and also us Southeast Asian companies to go to China."
The stake sale of CIMB Securities International would see CIMB Group and China Galaxy run a 50:50 stockbroking joint venture outside of Malaysia. The unit comprises institutional and retail brokerage, equities research and associated securities business across Indonesia, Singapore, Thailand, Hong Kong, South Korea, India, U.K. and U.S.
CIMB's latest announcement came two years after the collapse of a potential $20 billion three-way merger to form one of Southeast Asia's largest financial groups. If the plan had gone ahead, the merger of CIMB, RHB and Malaysia Building Society would have overtaken Maybank as the largest banking group in the country.
Changed market conditions were cited as reasons behind the failed plan.
In the next few months, the Malaysian banking sector could see its largest deal with the merger of RHB and AmBank to form a group worth about $9 billion.