Banks must deliver benefits to all related parties and shareholders: CIMB chief

2017.06.09 15:20:21 | 2017.06.09 17:18:12

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The golden rule for banks is trust, and banks must earn it by working to enhance benefits for not only the shareholders, but also its customers and employees, said Nazir Razak, chairman of the Malaysia’s second largest financial group CIMB.

During a recent interview with Maeil Business Newspaper, Razak emphasized that highest virtue for bankers should be integrity, the devotion to see through promises.

He also said that now the success of a bank is determined by how much benefit it creates for its customers, employees and management as well as shareholders.

Razak has been credited for successfully leading the ASEAN’s fifth largest financial group, surviving a series of financial crisis in Asia. He is the youngest son of Malaysia’s second prime minister Abdul Razak, and a brother of the current prime minister Najib Abdul Razak.

Following is the interview with Nazir Razak.

Q: What was the motivation for you to work as a banker?

A: In 1989, I completed my studies in the UK and came back to KL with a master’s degree in economics and politics, but without any idea about the job I wanted. One of my brothers suggested that I work in corporate finance as the best way to learn about the corporate world. So I joined CIMB’s corporate finance department at entry level just to find my feet. Instead, I found my calling and remained a banker at CIMB for my whole career. I enjoy banking, especially investment banking, and at CIMB, I found the foundations of a business I could help grow into something special - from a small Malaysian investment bank to a leading ASEAN universal bank.

Q: What do you believe is the best performance of you or your company since you started to work as a banker?

A: I have been privileged to have been able to lead the transformation of CIMB from a small Malaysian investment bank to a leading ASEAN universal bank through a series of mergers and acquisitions as well as new builds across the region since 2005. We merged with two banks in Malaysia, two banks in Indonesia, one bank in Thailand and two regional investment banks, and started new banks in Singapore, Cambodia, Laos and Vietnam. Our total assets have grown from RM424 million in 1989 (the year I joined CIMB) to RM506 billion as at March 2017, and staff strength from 69 to 39,000. They whole thing has been an amazing growth story.

On a personal level, I have been involved in a long list of major investment banking deals that transformed corporate Malaysia, including the IPO of Tenaga Nasional and a mega merger that created Sime Darby today.

Q: What do you think is the most important factor to make a successful finance company?

A: Success will always be determined by the customer: How you serve them, retain them and work with them.

Q: Most of industries must have restructuring program for survival. Do you have any experience of restructuring?

A: Since 2014, CIMB has been on a transformation program called T18, short for Target 2018. In view of the current ‘perfect storm’ - the combination of rapid technological advances, slower global growth and banking re-regulation - I am glad that we started on this journey to recalibrate early through various measures, including optimisation of capital, reduction of costs, closure and divestment of unprofitable businesses, revamp of organisational culture, and investments in digital banking and advanced data analytics. I personally think all banks have to go through the pain of recalibration of their businesses because the operating environment has changed so much and is anticipated to change even more dramatically in the next few years.

By Noh Young-woo

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