CIMB Group Holdings Berhad, a universal bank headquartered in Kuala Lumpur, Malaysia, plans to open a branch in the Philippines before the end of the year, a source from the Bangko Sentral ng Pilipinas said in an interview.
The source said the policy-making Monetary Board was expected to approve the CIMB’s application to operate domestically “within this year.”
CIMB Group chief executive Tengku Datuk Seri Zafrul Aziz said in January this year the bank submitted an application to the Bangko Sentral to start banking operations in the Philippines as the group planned to complete its presence in all 10 member countries of the Association of Southeast Asian Nations.
The bank’s last expansion into Asean was in Vietnam, where a full banking license was granted in December 2016.
CIMB said earlier it was looking at mid-tier Philippine banks as possible acquisition targets after a failed attempt to buy into Bank of Commerce in 2013 on valuation issues.
CIMB Group is an Asean investment bank, the largest Asia Pacific-based investment bank (except Japan) and one of the world’s largest Islamic banks. CIMB has a wide retail branch network with 1,080 branches across the region.
The group operates under several entities, which include CIMB Investment Bank, CIMB Bank, CIMB Islamic, CIMB Niaga CIMB Securities International and CIMB Thai.
The group’s business activities are primarily in the areas of consumer banking, wholesale banking, investment banking, corporate banking treasury, and strategic investments. Its core markets are Malaysia, Indonesia, Singapore and Thailand.
CIMB Islamic operates in parallel with these businesses, in line with the group’s dual banking model.
The group has over 40,000 employees across 18 countries, covering Asean and major global financial centers.
The group’s geographical reach and its products and services are complemented by partnerships. Its partners include the Principal Financial Group, Bank of Tokyo-Mitsubishi UFJ, Standard Bank and Daewoo Securities.
Bangko Sentral officials said the country remained an ideal location for foreign banks because of the liberalized domestic banking industry and promising growth prospects of the economy.
Switzerland-based bank Credit Suisse recently signified its intention to put up a representative office in the Philippines.
The Bangko Sentral allowed 10 Asian banks to fully operate in the country over the past three years. These are Japan’s Sumitomo Mitsui Banking Corp.; Singapore’s United Overseas Bank Ltd.; South Korea’s Shinhan Bank, Industrial Bank of Korea, and Woori Bank; Taiwan’s Cathay United Bank, Chang Hwa Bank, First Commercial Bank, Hua Nan Bank and Yuanta Commercial Bank Co. Ltd.
Six applications are currently pending at the Bangko Sentral, including two from Taiwan, one from Indonesia, two from China and one from Korea.
Under Republic Act 10641, which further liberalized the banking industry in 2014, foreign banks are allowed to control up to a combined 40 percent of the total assets of the banking system.
The Monetary Board approved the implementing rules and regulations of Republic Act 10641 in November 2014, which allowed the full entry of foreign banks into the country.
RA 10641 amended RA 7721, which was passed into law in May 1994.