CIMB Group Holdings Berhad (CIMB) and China Galaxy Securities Co. Ltd. (CGS) announced that, their respective wholly-owned subsidiaries CIMB Group Sdn Bhd and China Galaxy International Financial Holdings Limited (CGI), have completed the sale and purchase of 50% interest in CIMB Securities International Pte Ltd (CSI). With the completion, CIMB and CGS have now become 50:50 shareholders of CSI (the JV) and CSI will be rebranded as CGS-CIMB Securities once regulatory approvals are obtained.
CSI is the holding company of CIMB’s ex-Malaysia stockbroking business comprising institutional and retail brokerage, and equities research in Indonesia, Singapore, Thailand, Hong Kong, South Korea, India, the UK and the USA. The transaction would improve CIMB’s cost-to-income ratio by over 100 bps and Core Equity Tier 1 ratio by around 10 bps.
The JV marks the first foray by a Chinese stockbroker into Southeast Asia, and the start of a long-term strategic partnership between CIMB and CGS. The stockbroking JV will benefit from CIMB’s established network and footprint in Southeast Asia, and CGS’s technological know-how, wide client base, as well as deep presence in and access to the Chinese market. CIMB and CGS also see this JV as the first step to facilitate greater investment and capital flows between their respective markets.
Group Chief Executive, CIMB Group, Tengku Dato’ Sri Zafrul Aziz said, “We are delighted with the successful completion of this JV with China Galaxy International. This heralds the beginning of a scalable Pan-Asian brokerage led by two formidable groups, one in ASEAN and the other in China. This move also reflects CIMB’s proactive pivot in response to the changing landscape of the stockbroking industry. With superior solutions and greater market access, I am confident that the JV will be successful in delivering better value to our existing and future clients.”
Chief Executive Officer of CGI, Mr. Derrick Lau commented, “Southeast Asia is an important part of CGS’s strategic growth plans and the collaboration with CIMB will position the JV as the stockbroker of choice in Asia to ride on the increasing trend of cross-border investments under China’s Belt and Road Initiative. We are confident that together with CIMB and the team at CIMB Securities International, by sharing a common vision and goals going forward, the JV will scale new heights in the Asian stockbroking industry.”
As for the inclusion of CIMB’s Malaysia stockbroking business into the JV, this is targeted to be completed by the first half of 2018.