CIMB Group Holdings Bhd · MYX:CIMB
CIMB Group Holdings Bhd — Merger or Acquisition (April 2012)
38 slides from CIMB Group Holdings Bhd's merger presentation, Apr 2, 2012
Slide 1: Acquisition of RBS's APAC ECM, CF and Cash Equities Businesses
Acquisition of RBS’s APAC ECM, CF and Cash Equities Businesses 2 April 2012
Slide 2: Agenda
Agenda 1. Summary 2. RBS’s APAC ECM, CF and Cash Equities 3. CIMB’s IB and Securities 4. Deal Structure 5. Risks and Challenges 6. Strategic Rationale 7. Effects of Proposal 8. Timeline 9. Final Remarks
Slide 3: Summary
SUMMARY ba) CIMBGROUP
Slide 4: The Deal Formula
The Deal Formula #1 APAC Based IB #1 ASEAN TOP 10 APAC IB FRANCHISE IB FRANCHISE Anchored by a leading ASEAN Universal Bank 4
Slide 5: RBS's APAC ECM, CF and Cash Equities
RBS’s APAC ECM, CF AND CASH EQUITIES
Slide 6: About RBS
About RBS RBS Group has decided to exit some of its APAC (ex-Japan) investment banking and cash equities business. These comprise: IB: ECM, CF (M&A, Sector Advisory and In-Country Investment Bankers) Cash Equities: Equities sales, execution and research The business comprises equities licens
Slide 7: APAC (on-Ground) Presence (Businesses Identified For Exit)
APAC (on-Ground) Presence (Businesses Identified For Exit) Cash Equities IB Stock KEY APAC Exchange Research M&A ECM Sectors IB License Hong Kong Australia India Korea Singapore Taiwan Indonesia China Thailand () () Malaysia (
Slide 8: League Table and Accolades
League Table and Accolades League Table Rankings 2011 M&A ECM IPO RBS Market Market Market Rank Rank Rank Share Share Share APAC 10 5.5% 12 2.1% 17 1.4% ASEAN 8 8.1% 20 1.2% - - Best M&A House 2011 Best Deal 2011 – Best M&A Deal – Rachaburi Hong Leong Bank Berhad IPO of The Year 2010 – Electricity G
Slide 9: RBS's Recent APAC ECM, CF and Cash Equities History
RBS’s Recent APAC ECM, CF and Cash Equities History Expanded corporate access program with Acquired ABN #1 M&A advisor to 2010-11: Over 70 15 investor AMRO IB and Cash Asian companies Rebuild of banking and 130 conferences and over Equities Business buying into Europe Korea IB team equity new hires
Slide 10: CIMB's IB and Securities
CIMB’s IB and SECURITIES ba) CIMBGROUP
Slide 11: CIMB's Wholesale Banking
CIMB’s Wholesale Banking Group CEO Corporate Banking, Investment Group Strategy & Treasury & Markets Banking Strategic Investments Corporate CCS & Advisory Group Strategy Banking Trading & Sales Equities Private Equity Securities Strategic DCM Services Investments Regional Group Asset Treasurer Mana
Slide 12: Regional Investment Banking and Brokerage Leadership
Regional Investment Banking and Brokerage Leadership 2011 2010 2011 2010 ECM Market Market IPO Market Market Rank Rank Rank Rank Share Share Share Share Malaysia 35.5% 1 28.4% 1 Malaysia 31.7% 1 30.1% 1 Indonesia 4.7% 9 5.2% 8 Indonesia - - 8.6% 4 Singapore 3.7% 7 2.0% 10 Singapore 3.0% 5 1.4% 16 Th
Slide 13: Notable IB and Securities Awards
Notable IB and Securities Awards Best IB Best ECM & IPO Best M&A Best Broker & Research Asia Best Equity House SapuraCrest Petroleum-Kencana Best Investment Bank in ASEAN Bumi Armada’s USD888 mil IPO Petroleum’s RM11.9 bil M&A Best Institutional Broker Best Investment Bank (Msia) Best Equity/IPO Dea
Slide 14: Deal Structure
DEAL STRUCTURE ba) CIMBGROUP
Slide 15: Scope of Acquisition
Scope of Acquisition 1. APAC businesses Cash Equities (excluding South East Asia and South Korea) Investment Banking (excluding South Korea) 2. Legal entities – Only 3 in Australia 3. Customer accounts and executed / secured mandates (subject to clients’ consent) 4. Selected employees - Approxim
Slide 16: Scope of Acquisition by Country
Scope of Acquisition by Country APAC Businesses Jurisdiction CE IB Details Hong Kong / Transfer employees / mandates to CIMB Securities (HK) Ltd / CIMB Shanghai China Representative Office To acquire: RBS Equities (Australia) Ltd Australia RBS Corporate Finance (Australia) Ltd RBS
Slide 17: Investment Cost
Investment Cost GBP ‘mil Breakdown of Assets GBP ‘mil (Post Acquisition) Gross Payment to RBS 88.4 Cash & Receivables 113.1 Other consideration* 1.7 Fixed assets (including CAPEX) 49.7 Capital Injection 43.0 Goodwill 11.1 Additional CAPEX 40.8 Total Book value (Post Acquisition) 173.9 Total Investme
Slide 18: The Merged Entity
The Merged Entity CIMB Group 100% 99.99% 100% CIMB IB CIMB Bank CIMB Securities International 93.15% RBS RBS Equity CIMB Thai RBS Equities Corporate Capital (Australia) Finance Markets 99.99% Ltd (Australia) Ltd (Australia) Ltd CIMB Securities (Thailand) Hong Kong Malaysia Thailand Indonesia RBS bus
Slide 19: Regulatory Approvals Required
Regulatory Approvals Required Country Entities License/Membership Regulator RBS Equities (Australia) Ltd Australian Financial services Australian Securities and RBS Corporate Finance license Investments Commission Australia (Australia) Ltd Exchange membership Australian Stock Exchange
Slide 20: Risks & Challenges
RISKS & CHALLENGES ba) CIMBGROUP
Slide 21: Mitigating Key Challenges
Mitigating Key Challenges Description Mitigating Factors Ability to sign-on and retain key personnel Secured high rate of acceptance by key employees Human Resource Favourable market conditions Require necessary regulatory approvals for In preliminary consultation already transfer of licen
Slide 22: Strategic Rationale
STRATEGIC RATIONALE ba) CIMBGROUP
Slide 23: 3 Key Reasons
3 Key Reasons Description 1 A major leap, positioning franchise as No.1 APAC-based IB Expand our IB / Cash Equities footprint in Immediate expansion of capabilities in key markets, i.e. China, India, Australia, Taiwan, APAC South Korea (may take 3-5 years to grow organically) In line with CIMB
Slide 24: Consistent with Our V15
Consistent with Our V15 “The Leading ASEAN Franchise” At the end of 2015, CIMB Group will be recognised as THE leading ASEAN franchise, distinctive in its culture, processes and people. In its business of universal banking it will be strong across the region and well-connected in key markets beyond.
Slide 25: CIMB IB Beyond ASEAN Before RBS Acquisition
CIMB IB Beyond ASEAN Before RBS Acquisition Investment Banking Strategic Equities collaboration CIMB Bank and CIMB Securities Institutional broking partnership with Representative Offices in Shanghai. Main Capital Securities activities include market research and Taiwan facilitating offshore dea
Slide 26: The Franchise We Are Buying
The Franchise We Are Buying An APAC Equities, ECM and CF business with a long history and client goodwill A business which was underinvested in the latter days of ABN AMRO and early days of RBS In the last 2 years, significant investment has been made on both Equities and Investment Banking in
Slide 27: Complementary Merger – Broking, ECM & CF Across APAC
Complementary Merger – Broking, ECM & CF Across APAC Comparison of presence Broking ECM CF Markets RBS CIMB RBS CIMB RBS CIMB Malaysia (✔) ✔ ✔ ✔ ✔ ✔ China S. Korea Indonesia ✔ ✔ ✔ ✔ ✔ ✔ Taiwan Singapore ✔ ✔ ✔ ✔ ✔ ✔ India Hong Kong Thailand (✔) ✔ ✔ ✔ ✔ ✔ Thailand Philippines Malaysia Hong Kong ✔ ✔ ✔
Slide 28: APAC Advisory/ECM Leadership
APAC Advisory/ECM Leadership Advisory Equity Capital Markets Top 10 M&A advisor in APAC region (1) Top 10 ECM house in APAC region (1) Extensive corporate relationships and industry Achieves highly credible presence in Australia, HK / expertise China, India and Korea Strong cross-border ca
Slide 29: APAC Securities Leadership
APAC Securities Leadership Access Exchange ECM Research Access Exchange Research ECM Seoul Shanghai - New Delhi China Hong Kong Taipei Mumbai Malaysia Bangkok India Manila Kuala Lumpur - Sri Lanka Singapore Taiwan Indonesia Jakarta HK Singapore Research
Slide 30: Potential Synergies
Potential Synergies Description 1 1. ASEAN equities to RBS’ equity clients Cash Equities 2. CIMB’s strong ASEAN relationships marketed North Asian and Australian products 3. Leverage RBS’ electronic trading platform and merged entity’s pan-Asian research coverage of stocks 2 1. Leverage RBS’ platfor
Slide 31: Intra-Asian Trade and Investment Flows
Intra-Asian Trade and Investment Flows Riding on Growing Intra-Asia Flows Trade 11.6 10.6 1.72 North Asia 9.1 9.4 9.5 China 1.49 S. Korea 1.28 1.29 1.08 Taiwan South India Asia Thailand Hong Kong 2006 2007 2008 2009 2010 ASEAN Malaysia Intra-Asia Trade (USD 'tril) % of Total Trade Sri Lanka Singapor
Slide 32: Effects of Proposal
EFFECTS OF PROPOSAL ba) CIMBGROUP
Slide 33: Expected Financial Impact
Expected Financial Impact Projected FY12 Projected FY13 Share capital No impact No impact ROE Marginally Dilutive Accretive EPS Marginally Dilutive Accretive Cost to Income Increase Increase BPS Marginally Dilutive Accretive DL Ratio Marginally Increase Marginally Increase Gearing Ratio Marginally I
Slide 34: Timeline
TIMELINE ba) CIMBGROUP
Slide 35: Indicative Timeline
Indicative Timeline Key Milestones Indicative Timeline Economic ownership of businesses / Signing of MOU 1 Mar 2012 Signing of SPA and commence transition arrangements 2 Apr 2012 Regulatory approvals from relevant authorities May 2012 to Sep 2012 Transfer of legal ownership (by jurisdictions) May 20
Slide 36: Final Remarks
FINAL REMARKS ba) CIMBGROUP
Slide 37: Deal Snapshot
Deal Snapshot Favorable timing and deal structure A complementary merger Significant potential (revenue and cost) synergies to be realised Will not have a material impact on CIMB’s balance sheet CIMB IB becomes the largest Asia-Pacific based IB anchored by CIMB Group, the ASEAN UB Unique
Slide 38: Thank You
THANK YOU 38
CIMB Group Holdings Berhad — Merger or Acquisition (April 2012) on 6ix