CIMB Group Holdings Bhd · MYX:CIMB
CIMB Group Holdings Bhd — Merger or Acquisition (July 2008)
32 slides from CIMB Group Holdings Bhd's merger presentation, Jul 17, 2008
Slide 1: Bank Niaga – Bank Lippo Merger Analysts Briefing
Bank Niaga – Bank Lippo Merger Analysts Briefing 17 July 2008, Kuala Lumpur 1
Slide 2: Agenda
Agenda Recap Progress Update Refined Synergies and Integration Costs Key Strategic Imperatives and Outline of Business Plan Update on Indonesian Economy / Market Conditions Final Remarks 2
Slide 3: Recap
Bank Niaga – Bank Lippo Merger RECAP 3
Slide 4: An SPP-Driven Merger
An SPP-Driven Merger • Merger driven by Bank Indonesia’s Single Presence Policy (SPP) • No change in ultimate dominant shareholder – Khazanah Nasional • Compliance via Government’s preferred route, consistent with our investment track record and long-term commitment to Indonesia • Aided through by a
Slide 5: Key Merger Highlights
Key Merger Highlights • An Rp24.6 trillion / RM8.6 billion merger • Share swap ratio using P/Bv’07 of 3.0x for Bank Lippo and 2.5x for Bank Niaga • Innovative “standby buyer” scheme for CIMB Group to provide cash alternative to all minorities of Bank Niaga and Bank Lippo • New bank to be named “PT B
Slide 6: Progress Update
Bank Niaga – Bank Lippo Merger PROGRESS UPDATE 6
Slide 7: Where Are We Today
Where Are We Today Jan 08 Feb 08 Mar 08 Apr 08 May 08 Jun 08 Jul 08 Aug 08 Sep 08 Oct 08 Nov 08 Dec 08 3Q09 4Q09 Due Diligence & Deal Execution Conduct feasibility study BOD & BOCEGM Approvals (30 May) th of BCHB (11 July) / BN & LB (18 July) th th (5 months) 14/3 Commenced Due Regulatory Approval L
Slide 8: Key Progress Highlights
Key Progress Highlights • Received approval from Bapepam-LK for registration statement on 30th June 2008 • Received approval from shareholders of BCHB on 11th July 2008 • Received approval from Securities Commission on 14th July 2008 • Management team completed nationwide HR roadshow to explain merg
Slide 9: Approvals Required
Approvals Required • Indonesian approvals required: • Bapepam-LK (30 June 2008) • Shareholders at EGM (18 July 2008, by July 2008 cash outlay will be firmed) • Bank Indonesia • Minister of Law • Director General of Tax • Malaysian approvals required: • Shareholders at EGM (11 July 2008) • Securities
Slide 10: Refine Synergies and Integration Costs
Bank Niaga – Bank Lippo Merger REFINE SYNERGIES AND INTEGRATION COSTS 10
Slide 11: Bottom-up validation: Pre-tax run-rate synergies of US$70m
Bottom-up validation: Pre-tax run-rate synergies of US$70m - Total Synergies per annum (USD ‘mil) - 12.0 21.3 70.0 3.3 6.0 9.4 48.7 3.0 21.8 13.8 0.7 Retail Corp. & Retail Tranx Retail Revenue Managed Branch & Other Cost Total Bus. Banking (Increase Synergies Attrition Call (G&A, Non- Savings Bankin
Slide 12: Bottom-up validation: Average Run Rate Synergies of USD70.0M p.a
Bottom-up validation: Average Run Rate Synergies of USD70.0M p.a Impact to PBT (2009 – 2011) USD ’mil 100 80 60 61.6 49.1 48.7 40 35.6 70.0 p.a. 20 23.5 24.5 21.3 15.9 0 2009 2010 2011 Average Cost Savings Revenue Synergies Note: Averages shown may not be reconcile due to rounding 12
Slide 13: Estimated integration cost is US$90mil
Estimated integration cost is US$90mil US$ million IT 54.8 Branch Remodeling 26.4 Professional fees 7.6 Other costs* 37.0 125.80 Less FY2008 BAU Budget released 35.50 90.30 *Include communication, HR, relocation costs 13
Slide 14: Loan Loss Coverage
CIMB Niaga Proforma Ratios – LDR, NPL & Loan Loss Coverage Commentary 96.56 Commentary 92.44 88.34 88.10 87.97 79.30 Bank Niaga’s LDR will 68.80 reduce from 92.4% to 60.20 59.75 54.30 LDR 79.3% (%)(%) 46.74 43.60 LDR Ability to grow its loans more aggressively Panin Bank Niaga BII Danamon Permata CI
Slide 15: Cost/Income
CIMB Niaga Proforma Ratios – NIM & Cost/Income Commentary Commentary 10.86 10.40 NIM of the enlarged entity will increase with 7.00 6.09 6.06 lower COD and LDR NIM 5.81 (%) 5.72 5.32 5.27 5.20 NIM 5.06 5.00 BRI Danamon Permata BCA Lippo Panin CIMB Niaga Bank Niaga BII Mandiri Mega BNI Commentary 79.
Slide 16: Niaga-Lippo Diversifies BCHB Earnings
Niaga-Lippo Diversifies BCHB Earnings Geographic Segmental Before Niaga- Lippo BCHB Group FY07 contibution by PBT FY07 Consumer Bank Niaga 13% Banking CIMB-GK & 15% Overseas branches GAM & Insurance 4% 46% Domestic Overseas 81% 19% 54% Corporate & Treasury & Investment Investments Bank Banking 33% N
Slide 17: Key Strategic Imperatives and Outline of Business Plan
Bank Niaga – Bank Lippo Merger KEY STRATEGIC IMPERATIVES AND OUTLINE OF BUSINESS PLAN 17
Slide 18: Key Strategic Imperatives for CIMB Niaga
Key Strategic Imperatives for CIMB Niaga Segregation of Product Groups from Sales & Distribution to drive customer centricity, enhance cross-sell to all customer segments and improve utilisation and efficiency of sales force Product Groups Business Corporate Transactional Syariah Retail Banking Trea
Slide 19: Key Strategic Imperatives for CIMB Niaga
Key Strategic Imperatives for CIMB Niaga • Focus on product innovation & bundling for consumer segment – Retail consumer finance, cards & personal loans (monoline), consumer Banking liability & wealth management; direct & tele-sales • Leverage on branch network for distribution Business • Focus on p
Slide 20: Key Strategic Imperatives for CIMB Niaga
Key Strategic Imperatives for CIMB Niaga Treasury & • Treasury will play an active role in debt capital markets & syndication, FI cross market trading, FX sales, derivatives, structured products and balance sheet management – leverage on CIMB’s pioneering track record to develop IDR bond market • Fi
Slide 21: Key Strategic Imperatives for CIMB Niaga
Key Strategic Imperatives for CIMB Niaga • Over 650 branches with good coverage nationwide – from Sumatera to Branches Irian Jaya (5th largest in Indonesia) • Serves consumer (mass market & priority) and business customer segments • Supports “dual banking” concept to accelerate Syariah Banking growt
Slide 22: Combined strengths – CIMB Group, Bank Niaga, Bank Lippo
Combined strengths – CIMB Group, Bank Niaga, Bank Lippo IDR-denominated Market-Linked Deposit (MLD) marks a true manifestation of the combined strengths of CIMB Group, Bank Niaga and Bank Lippo November 2007 March 2008 To be launched on 21st July 2008 IDR241bn sold IDR294bn sold Joint distribution b
Slide 23: Combined strengths – Optimising combined branch network
Combined strengths – Optimising combined branch network Proper segmentation of the combined branch network will enhance sales & service efficiency Branch Geographical Branch Funding Branch Characteristic Estimated Head Of Type & Lending Numbers Branch Portfolio by SPD1(1) (IDR Bio) A Mostly Located
Slide 24: Combined strengths – Optimising combined branch network
Combined strengths – Optimising combined branch network Branches will offer full range of products and service offerings targeted at consumer (mass & priority) and business segments Sales Component Service Component Key Business Affluent: Mass Market Mass Market: Counter transactions Customer Traffi
Slide 25: Update on Indonesian Economy / Market Conditions
Bank Niaga – Bank Lippo Merger UPDATE ON INDONESIAN ECONOMY / MARKET CONDITIONS 25
Slide 26: Indonesian Economic Scenario in 2008
Indonesian Economic Scenario in 2008 2 major risks has emerged A. Local Risk 1 : The Return of Inflation - Higher energy and food prices level accelerate inflation to 11% by year end 2008 from 6.6% at the end of 2007 - GDP growth is forecast to increase to 6.1% for 2008 from a 6.3% increase in 2007
Slide 27: Indonesian Economic Growth Rates – Approaching Pre-Crisis Average
Indonesian Economic Growth Rates – Approaching Pre-Crisis Average Historical GDP growth 15 Pre-crisis average growth rate of 6.5% 8.9 10 8.8 8.5 8.2 7.8 7.8 7.5 7.5 7.5 7.3 7.2 7.2 6.9 6.3 6.2 6.0 5.9 5.8 5.7 5.5 5.1 4.9 4.9 4.9 4.9 4.8 4.4 5 3.8 2.5 0.8 % 0 2008F 1978 1980 1984 1986 1990 1988 1992
Slide 28: Indonesian Bond Yields
Indonesian Bond Yields • Bond yields have risen considerably during the year • Inflationary pressures is the underlying factor • Bank Indonesia has year to date increased the benchmark rate by 75 bps Indonesian SUN 16.00% 14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 14-Jul-08 16-Jan-08 0.00% 0 5 10
Slide 29: Conclusion
Conclusion • 29% fuel price hike will have short term negative economic impact • Weak investment climate in real economy is Indonesia’s major challenge • Government committed to introduce investor-friendly reforms • Indonesia has stronger economic fundamentals, now ten years after the Asian financia
Slide 30: Final Remarks
Bank Niaga – Bank Lippo Merger FINAL REMARKS 30
Slide 31: Final Remarks
Final Remarks • Merger is value creating for all stakeholders. • For BCHB, the merger enhances earnings complexion from a geographical and segmental stand point • The merger strengthens medium term growth prospect in a core market for the Group • CIMB Niaga will be Indonesia’s 5th largest bank lever
Slide 32: Terima Kasih
TERIMA KASIH BUMIPUTRA COMMERCE
CIMB Group Holdings Berhad — Merger or Acquisition (July 2008) on 6ix