CIMB Thai to spearhead consumer-centric IT system

Nazir Razak said in an interview this weekend that the state-of-the-art IT platform would be launched in Thailand by the end of the first quarter of next year.
“It will drive CIMB [in an instant], from Chiang Rai to Bali,” the CEO said.
The Malaysian banking conglomerate is investing an estimated US$400 million (Bt1.2 billion) in the IT system, which is being worked on by 250 specialists. It is designed not on a product base, as most banks’ IT systems are now, but on consumercentricity.
Nazir said that since taking over BankThai in 200809, CIMB’s efforts had gathered pace on changing the system and mindset from wholesale corporate banking to consumer, universal banking.
The Thai unit, which now has 3,800 employees and 157 branches, is headed by Subhak Siwaraksa.
In the first nine months of this year, CIMB Thai posted a net profit of Bt856 million, marginally lower than in the same period last year.
Subhak said the flood crisis could affect 8 per cent of its loan-portfolio customers, but only about 20 customers would need assistance, according to a preliminary survey.
Nazir reiterated his strategy to see CIMB Thai taking dynamic steps to grow by leaps and bounds, including through mergers and acquisitions.
The Thai unit is completing a deal to take over Siam Industrial Credit, a stock brokerage, at a cost of Bt767 million. “The acquisition strengthens our brokering platform on the Stock Exchange of Thailand. We are consistently among the top-three brokers in Malaysia, Singapore and Indonesia, but are only in the top 25 here. We want to ramp up quickly,” he said.
The move is also in preparation for further liberalisation of the Thai securities industry. “This will be good for the Thai market and for better competition ... I don’t like fixed pricing or cartels,” he added.
Nazir repeated a call for Asean to speed up economic integration, and to pursue the integration of financial services.
Securities and exchange commissions across Asean should jointly move towards creating a single stock exchange, dubbed “AseanX”. Such a bourse would serve larger Asean companies and provide the region with a competitive edge in view of globalisation and the consolidation of leading stock exchanges worldwide, he said.
Nazir said there was still time to change the current plan in which Asean is linking all its stock exchanges, so that local investors can invest across borders in other bourses within the regional grouping.
The CEO lamented that some brokers were against the formation of AseanX, as they wanted to protect their own interests.
He said CIMB Group was positioning itself as “the Asean bank” with its presence in all but two countries in the bloc – Laos and the Philippines. It is however, in talks to take over a Philippine bank.
Locally, regional scalability is starting to bear fruit for the bank with two recent landmark deals for Thailand. The first was the second listing of Sri Trang, a major Thai rubber group, on the Singapore Exchange, and the second an Islamic bond-raising in Kuala Lumpur for the PTT-Petronas joint venture.
Nazir welcomed the forthcoming Asean Economic Community (AEC) as providing a single production base for companies, with scalability benefiting Asean businesses in terms of costs and markets. However, he is wary of obstacles in the form of non-tariff barriers, as well as the fact that some businesses will be hit, as integration will create losers as well as winners.
“It is a risk factor that we have to manage ... It is better to think of the problems now rather than later ... AEC 2015 will not be a platform for progress in full glory,” he added.
While CIMB Group continues to express its long-term confidence in the Thai economy through a series of substantial investments, Nazir said the political upheaval of the past few years had been a distraction to business, and stability was needed.
He is not optimistic that Europe and the United States will quickly overcome their financial crises, as their political structure does not give the respective governments a mandate to fix the problems, but rather to compound them.
“If there are costs to a government, [the solution] would just be kicked out given the excessive checks and balances” in the system, he said.