CIMB and RBS sign cooperation agreement

CIMB Group and RBS (Royal Bank of Scotland) Group last week entered into a Cooperation Agreement (CA) to confirm their mutual understanding to explore cooperation in various areas of business.

The CA covers potential collaboration in capital markets activities, mergers and acquisitions, equities, derivatives, loan markets, trade advisory and trade financing solutions, cash management services and agent/custodian bank arrangements.

The agreement was signed by CIMB Group Chief Executive Dato’ Sri Nazir Razak and RBS Head of Asia Pacific International Banking Madan Menon. The signing was witnessed by Malaysia’s Minister of International Trade and Industry Dato’ Mustapha Mohamed and United Kingdom Minister of State for Trade and Investment Lord Green.

 “We’re extremely pleased to be able to do this so quickly after announcing our acquisition of RBS’ Investment Banking and cash equities businesses in Asia Pacific last week. This will provide a framework for our ex-RBS team to continue to work together with their ex-colleagues in areas of mutual interest between RBS and CIMB,” said Razak.

Razak further explained that the CA will allow both CIMB Group and RBS Group to leverage off each other in key Asia Pacific markets. “There is huge potential for cross referrals. RBS will be able to access CIMB capabilities in markets where we are strong, and vice-versa, we will be able to leverage RBS’s capabilities in markets where they are strong,” Razak added.

 “For instance, in many of our markets outside ASEAN we do not have lending capabilities and will be working with other banks.”

This is a direct follow on from the announcements made on 2 April with regards to CIMB’s acquisition of most of RBS’ Asia Pacific cash equities and associated investment banking businesses.

Since the acquisition of GK Goh Securities in 2005, CIMB’s investment banking franchise, including its securities operations, has been the market leader in ASEAN. It has full presence in key ASEAN markets and representation in New York, London, Shanghai, Mumbai, Hong Kong, Colombo and Bahrain. It also operates via partnerships in Taiwan, Korea and Australia.

The addition of the RBS units will mean that, upon regulatory approvals, CIMB will have new on-shore presence in Taiwan and Australia, as well substantially enlarged operations in Hong Kong, India and China. Meanwhile, CIMB will seek to set up new operations in Korea soon. This deal decisively transforms CIMB into an Asia Pacific investment bank.