FROM a small merchant bank back then, to Malaysia’s second largest banking group by assets and one of Asean’s leading universal banking groups, the CIMB Group Holdings Bhd (CIMB) has grown along with the nation, building it to reach many higher levels.
Being among the world’s largest Islamic banks, CIMB has a wide retail network with around 900 branches across the region with 38,000 employees across 15 countries.
CIMB is one the investee companies owned by Khazanah Nasional.
One of the key figures in building up CIMB; growing the company from where it started to where it is today, is none other than a local boy, CIMB chairman, Datuk Seri Nazir Razak.
Joining the group in 1989, as an executive in CIMB’s corporate finance department, Nazir has seen all the ups and downs of CIMB, which includes the collapse of the stock markets, due to the Asian Financial Crisis in 1997.
“CIMB has been my only employer, but I did not plan to become a career banker. After my graduation in the United Kingdom in 1989, I returned to Kuala Lumpur without much idea about the career that I wanted to pursue.
“One of my brothers suggested that I work at a merchant bank to learn about the corporate world,” said the youngest son of our second prime minister, Tun Abdul Razak.
He then went to join CIMB as an executive in the corporate finance department. Despite having punishing hours, his job was perfect for character building for someone who had a relatively privileged upbringing.
A small merchant bank punching well above their weight in the Initial Public Offering (IPO) segment, the vast changes in CIMB came when they won the mandate for the Tenaga Nasional IPO in 1992.
“The deal came with many firsts for the Malaysian market — global equity offering, pre-IPO roadshow, international book-building, employee share scheme and so on.
“After the IPO, everybody in global finance knew our name, but more importantly, we started to build a network of international bankers and fund managers,” he said.
The listing of CIMB Investment Bank in January 2003, became an assertion of independence as its parent company, Commerce-Asset Holding was already listed.
The publicity from the listing raised CIMB’s brand profile significantly, however the listing did not go well that the share price traded around the IPO price for the first three months.
“I was embarrassed as I rather fancied myself as an investment banker, yet my own IPO performed badly. We beat ourselves up until we found out why — the fund managers were unimpressed by our excess capital.
“So we shocked them with a huge dividend after only three months of listing, and from then on, we became a popular stock. To the date we delisted three years later in January 2006, the stock had returned 340 per cent to shareholders who had stayed with us since the IPO,” he said.
CIMB’s acquisition of Bumiputra-Commerce Bank in 2005 was the first step in our transformation from an investment bank to a universal bank, said Nazir.
“It was a dramatic deal in that the much smaller listed subsidiary effectively merged with the huge sister bank and took control of the parent listed company. For me, it was going from Chief Executive Officer of an investment bank of around 1,000 staff to CEO of a universal bank of around 15,000 staff,” he said adding that despite acquiring several other banks across Asean, the first would always be special.
The amazing growth and transformation of CIMB would have not happened if the country was not politically and economically stable.
“If you look at the nationalities of the leading banks in Asean today, there is strong correlation with the different history of national political economies,” he said and gave examples of tops banks from Philipines and Indonesia that have risen as their political economies have become more stable.
“We have to collectively work for it, and we have to make the right choices and decisions for ourselves based on today’s challenges and opportunities."
Grown to be Malaysia‘s second largest banking group by assets, Nazir said for CIMB to grow further to help build Malaysia as an investment hub for foreign market, it needs to navigate technology challenge with the right investment and strategies.
“For investors, CIMB offers exposure to an Asean bank that has all the ingredients to thrive in the long term. Also, we have a management team that has demonstrated strong change execution capabilities, which is crucial as well,” he said.
To help the younger generation in contributing to Malaysia’s socio-economic growth, he said, “Leaders need to empower them, at a pace that is faster than the older generation as now, the new generation understand the new order better.”
“It is ironic that if we think back to the early post-colonial days, we were actually pretty good at empowering young Malaysians. Look at how young the likes of (Tun) Musa Hitam, (Tan Sri) Rafidah Aziz and (Tun) Hanif Omar were when they got the top jobs, and they were excellent. We need to get back to that.”
In contributing to nation-building, Nazir called on the younger generation to always look at the glass as half full, and not half empty.
“Malaysia’s many challenges are also its great opportunities. For instance, communal relations are a big challenge, but if we collaborate well together, we have far greater potential to harness diversity and networks than other countries.
“You have to persevere. It is a long game, so when things do not look right, work at them and have patience. Don’t give up easily.”
Nazir ended with an anecdote which taught him how Malaysia was reforming; on how politics and business were separating.
“Around 2002, I received a phone call from Putrajaya, asking me if I had really called default on a loan belonging to a government minister. I nervously said yes, but then the caller said, “You did the right thing, well done. The minister asked me to call you so I had to lah. Carry on!”
“I was stunned but the incident said a lot to me about how we were reforming.
“I felt so motivated about being part of a reforming Malaysia Inc. Soon after, Khazanah Nasional Berhad was transformed and it spearheaded the government linked companies’ reforms that enabled us to dream and execute CIMB’s transformation from a Malaysian investment bank to an Asean universal bank,” he said.