Philippines operations approval strengthens CIMB’s position as universal Asean bank
KUCHING: CIMB Bank Bhd (CIMB) has received approval from the Monetary Board of the Bangko Sentral ng Pilipinas (BSP) to operate a branch in the Philippines and analysts believe that this will further strengthen the bank’s position as a universal Asean bank.
According to CIMB’s press statement, the bank is the first Malaysian banking group to be granted BSP’s approval to operate under the Republic Act no.10641, an act which allows the entry of foreign banks into Philippines through the establishment of wholly-owned operations with full banking authority.
“The award of the licence is in line with the liberalisation of the banking sector in the Philippines. The banking sector in the Philippines has been opened up to achieve greater financial integration and economic development among the Asean member countries.
“This will strengthen the group’s products and services offerings as a universal Asean bank,” the research arm of AmInvestment Bank Bhd (AmInvestment) said in a report.
It noted that this move follows the group’s earlier success in obtaining a banking licence in Vietnam in 2016 from the State Bank of Vietnam.
“Recall, the licence had allowed the group to offer retail and commercial banking products in Vietnam,” it added.
“With the retail branch in the Philippines to be fully operational only by the fourth quarter of 2018, and with the need to incur start-up expenses, the impact to our projected numbers for FY18 is expected to be minimal,” the research team opined.
“We believe that this approval will allow it to operate in the Philippines through a whollyowned banking subsidiary,” AmInvestment said.
It noted that among its peers, Maybank already has a presence in the Philippines via its commercial banking business under its 99.97 per cent-owned Maybank Philippines Incorporated (MPI) as well as through its investment banking arm, Maybank Kim Eng.
It further highlighted that the operations of Maybank’s commercial banking in the Philippines are significantly larger than that of CIMB with a network of 79 branches, located in various key cities in the country.
All in, AmInvestment upgraded its call on the stock to ‘buy’ from ‘hold’.
Source: Borneo Post Online