Aspiring to be top regional bank

KUALA LUMPUR -- During an interview with Sin Chew Daily, Renzo Viegas said CIMB had been lending its support to SMEs in the country to explore their potentials. Although it is still premature to tell how many SMEs would CIMB assist to explore Asean markets, the banking group is nevertheless very insistent in its Asean agenda, and has been setting its sights on becoming the primary banking group in the region.

"I believe ambitious individuals and businesses keen to explore the opportunities in Asean will approach us, and we will continue to bank on our advantage in this aspect to become the most integrated banking platform for the whole of Asean, using this platform to bring Asean closer to our customers."

Viegas said the Asean Economic Community (AEC) would be kicked off in 2015, facilitating the further expansion of businesses within the region as well as free movements of goods, skilled manpower and capital funds.

He pointed out, "As a universal bank for the Asean region, we believe our regional platform will be capable of bridging customers in this region. This is what sets CIMB apart from our peers.

"We have now set up regional offices in Malaysia, Indonesia, Singapore and Cambodia, offering services such as business connections, information on government and investment authorities, legal aspects, taxation, commercial banking, etc., with assisting our customers to build up business networks across Asean being our priority."

The CIMB Group is harnessing the regional infrastructure to organise business trips to Jakarta, Phnom Penh and Ho Chi Minh City with the latest trip being made merely a fortnight ago to call for some 60 business leaders from five Asean member states to explore business opportunities in Yangon. These delegates met the leading business tycoons as well as senior government officials in Myanmar.

In mid-2013, CIMB announced the setting up of the Asean Banking Solution (ABS) that would see the group consolidate its regional consumer banking and retain banking services, delivering positive Asean values to its customers.



"We are well aware that to win the faith of new customers, we need to put in more effort and resources."

Viegas said CIMB would do its best to give the customers "value added" services, for example by allowing them to take part in regional business opportunities, organise economic and industrial symposiums, seminars on funding and other areas of interest to businesses.

"We also have business community reach out programme, mainly to work with reputed business association in organising forums as well as product development. We firmly believe that position CIMB as a listening interested party is of utmost importance to us.

"CIMB is the exclusive sponsor of Sin Chew Business Awards, and this shows that we are dedicated to entrench our relationship with the business community."

He pointed out that CIMB serves its customers through two major channels, namely enterprise banking and commercial banking. Enterprise banking targets enterprises with annual turnovers in excess of RM10 million while commercial banking targets clients with annual turnovers between RM10 million and RM250 million.

CIMB has positioned itself to meet the needs of these two major client groups.It understands that enterprise banking customers require generalised products and services, and more extensive networks and contact points to attain such services.

"In view of this, we have set up SME counters at 150 branches nationwide, allowing our customers access to speedier application procedures and services."

Commercial banking, meanwhile, needs to provide customised financial solutions for individual clients while allowing more flexibility in non-collateral loans. CIMB's 23 business centres made up of 180 business relations managers will cater to the diverse needs of the clients and provide customised business solutions whenever the need arises.

In commercial banking, medium enterprise teams have been set up to serve a broader clientele in accordance with the needs of the customers. This shows that CIMB understands the different needs of different customers.

As an all-rounded banking group, CIMB is believed to harness its resources and expertise in retail and investment banking to offer impeccable services catering to the business needs of individual customers.

With more than 300 branches nationwide, CIMB has won accolades for its outstanding banking transaction and cash management services, while its comprehensive online banking services and diligent team of business relations managers offer more personalised banking services and experience for customers.

CIMB's winning edge could be further manifested, especially its much acclaimed investment banking and consultancy services which could be traced in eight of the 10-member Asean states.

CIMB has invariably inherited the asset quality problems from its M&A activities years ago. To fully overcome such problems, CIMB needs to continuously fortify its portfolio management infrastructure and early warning professional procedures.

Viegas told Sin Chew Daily, "Today we can safely and sustainably promote business growth, particularly in a highly versatile business environment.

"Our first defence barrier is none other than our well trained customer relations managers who constantly evaluate credit risks while continuously upskilling themselves. More importantly, banking personnel must keep abreast of the developments in various industries. We hold regular dialogues with economic and industrial experts within the banking group in a bid to update our frontline personnel, credit managers and institutional fund managers of the latest developments as well as prospects of relevant industries.

"We are also further fortifying our risk management framework through the establishment of 'risk playbook' while building stronger individual accountability and credibility in the entire loan application and approval procedures.

Viegas is optimistic CIMB's enterprise and commercial banking divisions can register double digit growth this year. CIMB also boasts sterling performances in commercial property funding, and anticipates continued robust growth for this portfolio.

"In the meantime, we have also been very careful on non-collateral or semi-secured loans. That said, we remain upbeat to record sustained growth for 2013 through 2014.

"In the future, we will move in tandem with SMEs in enhancing their contribution towards the national economy. With improved professionalism and infrastructure we have in place, we are totally upbeat of sustained growth in this domain."

Enterprise and commercial banking divisions made up 25% of the group's consumer banking turnover and pre-tax profit during the first half of this year. CIMB boasts some 350,000 commercial banking customers, a very significant ratio of all the SMEs in the country. Meanwhile, the group's trade financing division is also very active, and the trade financing of enterprise and commercial banking makes up a whopping 55% of all the group's trade assets.

Viegas said, "From the best banking practices here and abroad, we can get the best model for SME business. CIMB boast many advantages, and these advantages put together can create exclusive value positioning for our customers."

"When I joined CIMB early last year, I had a lot of faith in building up a powerful base. We have a powerful brand and extensive domestic and regional network as well as capable and diligent staff.

"But we need to move in fast in order to ensure future competitiveness, especially in cost effectiveness, innovation and internal collaboration.

"In the long term, we need to evaluate the development of banking trends in order to come up with products and services that meet the needs of current and future customer needs.

"I am very encouraged by the fact that we are moving in the right way in many areas.

"I believe the CIMB network is the principal dynamo for our long-term success. I am delighted to discover that group CEO Datuk Seri Nazir Razak is enjoying very close working relationship with our teams in various markets.

"I meet Nazir, our Malaysian and regional colleagues regularly to discuss company's progress and exchange ideas on current and future growth prospects."

Owing to reduced contribution from the Indonesian business and lack of support from large IPO activities, CIMB's second quarter (ending June 30, 2013) net profit slid 4.99% from RM1,109.688 million to RM1,054.267 million.

Boosted by the disposal of CIMB Aviva Assurance, the group's H1 net profit rose 15.1% to RM2,400.445 million from RM2,120.355 million previously. Nevertheless, if the relevant profit were to be excluded, the group's net profit for first half of this year would remain flat.

Q2 turnover grew 3.57% to RM3,444.227 million, bringing the total turnover for the first half of this year to RM7,389.547 million, up12.3% y-o-y.

The bullish performances of consumer banking in Malaysia and Singapore, along with regional enterprise banking business, have offset the lacklustre performance of Indonesian business.

The group's regional consumer banking business pre-tax profit for the first half of this year improved 12.2% to RM1,137 million, of which the Malaysian business grew 14.7%, Indonesia 3.1% while Thailand business retreated RM1 million.