CIMB Group clarifies Indonesian banking unit privatisation stance

KUALA LUMPUR: CIMB Group Holdings Bhd has clarified that it has made no decision or tabled any formal proposal to privatise its Indonesian banking subsidiary, PT Bank CIMB Niaga Tbk, following reports suggesting a potential delisting.

"CIMB Niaga remains an integral part of the group's regional footprint, and the group remains committed to its operations in Indonesia," it said in a statement.

The group added that it would continue to comply with all applicable regulatory guidelines, including minimum public shareholding or free float rules, in a timely and structured manner.

The statement follows reports that CIMB was considering options for CIMB Niaga as Indonesia tightens minimum free-float requirements to improve stock market liquidity and transparency.

Analysts had identified privatisation, a fresh share offering and a placement to strategic investors as possible options for the group to address the requirements.

Indonesia's revised rules require CIMB to reduce its stake in CIMB Niaga to no more than 87.5 per cent by March 2027 and 85 per cent by March 2028, from about 91.4 per cent currently.

However, market volatility and concerns over a potential downgrade of Indonesia's market classification by MSCI have weakened the appeal of a new share offering.

Public Investment Bank Bhd estimated that a full buyout of CIMB Niaga's minority shareholders could cost about RM800 million, although the potential transaction's structure remains uncertain.

Analysts have also pointed to CIMB Niaga's wealth management, selected small and medium enterprise banking and Shariah banking businesses as key contributors to its longer-term prospects in Indonesia.