This article first appeared in The Edge Malaysia Weekly, on March 28 - April 3, 2016.

CIMB Group Holdings Bhd’s head honcho Tengku Zafrul Aziz will step down as group wholesale banking head, handing the baton over to Mak Lye Mun, sources say.

It is understood that Zafrul will continue to be CEO of CIMB Bank Bhd and group chief executive of CIMB Group.

“Mak, who is also the country head of CIMB Singapore, will take over as CEO of group wholesale banking effective April 1,” says a banking source.

It is understood that the investment banking, private banking, corporate banking, treasury and markets, transaction banking, equities as well as analytics and strategy businesses will report to Mak, who will then report to Zafrul.

Mak, a seasoned investment banker, joined the banking group following its acquisition of GK Goh Securities Pte Ltd in 2005. He had served as head of corporate finance at GK Goh Securities.

According to CIMB Group’s website, Mak was head of the mergers and acquisitions advisory department at The Development Bank of Singapore Ltd (now known as DBS Bank Ltd). He had held various senior positions in the corporate finance divisions of Vickers Ballas & Co Pte Ltd, Ernst & Young, Oversea-Chinese Banking Corp Ltd and Citicorp Investment Bank (Singapore) Ltd.

There have been a couple of movements at CIMB Group recently. Earlier this year, Zafrul took the helm at CIMB Bank and relinquished his role as CEO of CIMB Investment Bank Bhd. Datuk Kong Sooi Lin, meanwhile, became group CEO of CIMB Investment Bank.

According to a banking analyst, this is part and parcel of streamlining the group’s operations. “The banking group’s CEO cannot be wearing too many hats.”

He says industry talk has it that the second largest banking group will be hiring Michael Greenall as head of research. “The research outfit hasn’t had a head for some months now. Michael was formerly head of research at BNP Paribas.”

In 2015, the wholesale banking business contributed 37% to CIMB Group’s profit before tax (PBT) of RM3.9 billion. This is compared with 37.5% in 2014, 46.5% in 2013 and 54.5% in 2012.

As a comparison, Public Bank Bhd’s PBT from corporate lending, treasury and capital market as well as investment banking made up only 15% of the group’s PBT in 2015.

It has been just over a year since CIMB Group announced its T18 plans. In February last year, it outlined the plans with a target of achieving a return on equity of 15%, common equity tier 1 ratio of over 11%, a cost-to-income ratio of below 50% as well as a 60% consumer banking income contribution by end-2018.

The group has also undergone a series of internal reorganisation and corporate exercises.

In 2015, it cut over 150 jobs outside Malaysia and Indonesia. It also undertook a mutual separation scheme (MSS) for its Malaysian and Indonesian businesses where a total of 3,599 applications — 1,891 from Malaysia and 1,708 from Indonesia — were approved.

Zafrul told reporters in January that the group is not planning any more MSS in Malaysia and Indonesia. “The focus this year will be on improving our productivity, and continuing our T18 agenda. In short, there will be no more MSS or retrenchment.”

The banking group also retrenched 30 staff at its Hong Kong investment banking and equities operations in January this year.

Just last week, it announced that it has signed a conditional pact to sell a 51% stake in PT CIMB Sun Life to its joint-venture partner, Sun Life Assurance Company, for US$42 million.

Hong Leong Investment Bank Research says the divestment allows CIMB Group to streamline its insurance portfolio as it exits the non-core business and focuses on its distribution capabilities. The local research house adds that the banking group is a step closer to its T18 aspirations.

Investors have taken notice of the stock of late. Having fallen below the RM4 range earlier this year and touching a six-year low of RM3.85 on Jan 21, the counter began rising last month and closed at RM4.70 last Friday. The resurgence was largely due to its results for the fourth quarter ended Dec 31, 2015 (4QFY2015).

CIMB Group’s net profit for 4QFY2015 more than quadrupled to RM825.7 million, due to higher operating income and lower allowances made for impairment losses on loans, advances and financing. Net profit for FY2015 came in at RM2.85 billion, which is 9% lower than the previous year’s. 

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