CIMB to trim stakes, cede control of asset management JVs

January 11, 2018 | By | Reply More

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KUALA LUMPUR: CIMB Group Holdings Bhd is relinquishing control of its asset management joint ventures with Principal Financial Group Inc by divesting part of its stakes for RM470.29 million.

CIMB is expected to recognise a gain on disposal of RM950 million and a common equity tier 1 ratio improvement of 18 bps after the divestment.

CIMB is divesting a 20% stake in CIMB-Principal Asset Management Bhd (CPAM) to Principal International (Asia) Ltd, and a 10% stake in CIMB-Principal Islamic Asset Management Sdn Bhd (CPIAM) to Principal Financial Services Inc.

Once completed, Principal will increase its ownership to 60% with CIMB retaining a 40% stake in each of the entities.

CIMB and Principal Financial Group have signed agreements for Principal to gain additional ownership of CPAM, which has more than RM70 billion in assets under management, as well as CPIAM, pending regulatory approval.

CIMB group CEO Tengku Datuk Seri Zafrul Tengku Abdul Aziz said as a leading Asean universal bank, asset management continues to be an integral part of its regional banking business.

“This shareholding realignment will ensure that our asset management joint venture with Principal achieves its maximum potential and continues to be sustainably value-accretive to CIMB.

“Scale and extensive investment expertise are important to this business and we believe this strategic realignment will enhance the value proposition of the joint venture to enable us to serve our customers better,” he said in a statement.

The transaction is expected to be completed in the second quarter of 2018 and is subject to the relevant approvals.

CIMB and Principal have teamed up in the region since 2004 and grown their operations across Malaysia, Singapore, Indonesia and Thailand.

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