Thursday, 10 May 2012

RAM Ratings: CIMB’s ratings unaffected by proposed acquisition of Philippines’ Bank of Commerce

KUALA LUMPUR (May 10): RAM Ratings said that CIMB Bank Bhd’s proposed acquisition of a 60%-stake in Philippines-based Bank of Commerce (BoC) from San Miguel Corporation had no immediate rating impact on the Bank’s AAA/Stable/P1 ratings.

The rating agency said On Thursday that The RM881 million deal, currently pending regulatory approval, would be entirely financed by CIMB Bank’s internal funds.

“Based on RAM Ratings’ assessment, the proposed acquisition is expected to have minimal impact on the Bank’s key financial indicators.

“CIMB Bank’s overall risk-weighted capital-adequacy ratio is likely to remain above 15% after the acquisition, which is anticipated to be completed sometime this year,” it said in a statement.

RAM Ratings said the proposed acquisition of BoC represented a strategic part of CIMB Group’s regional aspirations.

“BoC is a relatively small bank given its position as the sixteenth-largest commercial bank out of 38 universal and commercial banks in the Philippines; its assets are only equivalent to about 3% of CIMB Bank’s.

“As with all acquisitions, there could be potential challenges along the way, particularly with respect to aligning the best practices and policies of BoC and CIMB Bank. RAM Ratings will continue monitoring the pertinent developments relating to this proposed acquisition,” it said.

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