Principal to increase stake in Southeast Asia ventures

"As a leading Asean universal bank, asset management continues to be an integral part of our regional banking business".

The second-largest bank in Malaysia by assets has agreed to divest 20% in its asset management joint venture, and 10% in the Islamic asset management unit to Principal Financial Group, the company said in a statement to the bourse on Thursday.

Post sale, CIMB will be left with 40% in each CIMB-Principal entity.

This transaction is expected to be completed in the second quarter of 2018 and is subject to the relevant regulatory approvals.

CIMB-Principal Asset Management Group has more than RM70 billion in assets under management. If successful, CIMB will book a gain of about 950 million ringgit while its Common Equity Tier 1 ratio will improve by about 18 basis points, or 0.18 percentage-point, the company added. "This shareholding realignment will ensure that our joint venture with Principal achieves its maximum potential and continues to be sustainably value-accretive".

CIMB and Principal have teamed up in the region since 2004 and grown their operations across Malaysia, Singapore, Indonesia and Thailand.

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