CIMB Mulling Sale Leaseback of Retail Bank Branch Portfolio in Malasia

Business Times - December 3, 2007

CIMB Group, Malaysia's biggest investment bank. is mulling a third sale and leaseback exercise on some buildings that house its operation and bank branches as part of its plan to manage capital more efficiently, its chief said.

Group chief executive Datuk Nazir Razak said it has done two such exercises to its current head office Bangunan CIMB, and Menara Bumiputra-Commerce, its new retail banking headquarters on Jalan Raja Laut which is still under construction.

"We still own a lot of branches, the Jalan Tun Perak building (which houses the retail banking operation now), Menara SBB. It could be a third sale and leaseback exercise involving the rest of the portfolio," he said yesterday.

"We have embarked on it and done two buildings, there is most likely to be a third portfolio, where we will put the other buildings inside," Nazir added.

He said modern banks of today should not engage in other things such as building ownership and management. Lenders are better off renting the buildings, release the capital and plough it back to the business. By selling and renting back Menara Bumiputra-Commerce for example, the bank will have the capital to write RM3.6 billion in new loans, he said. Sphere: Related Content