NEW YORK CIMB LAUNCH

 CLOSING ADDRESS
BY
 

TAN SRI NOR MOHAMED YAKCOP

MINISTER OF FINANCE II

THURSDAY, 07 JUNE 2007

YBhg. Tan Sri Dato' Md Nor Md Yusof
Chairman
CIMB Group

YBhg. Dato' Nazir Razak
Group Chief Executive
CIMB Group

Mr. Stewart Palmer
Chief Executive Officer
CIMB -  GK Securities (USA) Inc.

It is indeed an honour for me to be here this morning to officiate the launching of CIMB New York. The launch of CIMB New York today marks an important development and  another accomplishment of the CIMB Group, as the group position s itself to become a dynamic, competitive and efficient financial player that is able to contribute not only to the development of the Malaysian economy, but also to enhance the integration of our financial system with the global financial market.

2. The launching of CIMB New York is also a  significant milestone for the banking industry in Malaysia. It reflects our ability to adapt to the increasingly challenging and competitive environment in the international financial market.

3. On this occasion,  I would like to congratulate the CIMB Group for being forward-looking and the group's strong  commitment to contribute to the success of Malaysia's financial sector.  Today, the Group  has made significant breakthroughs in expanding its regional and international dimension. I am confident that CIMB New York will be able to achieve a quantum leap by leveraging on the integrated financial services and operating infrastructure of the CIMB Group.

4. Being the second largest bank in Malaysia and as one of the major regional players in South East Asia, CIMB is indeed  one of Malaysia's successful Government Linked Company stories. In just two years, CIMB has transformed itself from Malaysia's no. 1 investment bank into a regional universal banking group. Reflecting its rapid expansion, the CIMB Group has grown from a staff strength of 1,000 in Malaysia to 20,000, with operations in 12 countries, while its market capitalization has tripled from 6.3 billion ringgit to 19.5 billion ringgit.

5. The CIMB Group has its roots as a premier investment bank and a consumer bank with the largest network locally. Its strategic expansion drive has enabled it to leverage on the Group's consumer banking services and gain further scale in the market place. It has made CIMB one of the leading universal banks in the region, in line with its vision to be "Southeast Asia's most valued universal bank".

6. In this era of globalization and greater financial integration, the establishment of CIMB New York is timely as it sets the stage for more Malaysian financial institutions to expand beyond domestic borders and  to offer  financial products and services in international currencies to the global financial community. This presents not only new prospects for business operations, but also the ability to tap the vast opportunities  for larger operations in the global market place.

7. However, to be successful globally, financial services players must leverage on their competitiveness to deliver innovative and diversified products and services. To gain  competitive advantage, efficiency must continue to be harnessed, and costs reduced, while at the same time, able to meet the growing sophistication of investors demand.
8. For the Malaysian investors and consumers, the ability of our financial institutions to make further inroads into international markets will provide them with greater accessibility  to world-class products and services.

Distinguished guests,

9. The success of CIMB Group, both in their domestic and international operations, augurs well for the Malaysian economy. Our economy continues to remain strong, with our  first quarter GDP growth of 5.3 percent, which had  surpassed market expectations. On the back of this strong growth, the Ringgit continues to strengthen against the US Dollar, reflecting our strong underlying economic fundamentals. Our stock market is among one of the best performing in Asia. The buoyancy of the stock exchange is a reflection of increased investor confidence towards the Malaysian market and its long-term prospects. Last month, Bursa Malaysia's benchmark composite index, the KLCI, hit a record high of 1,368 points, with market capitalization of 1.09 trillion ringgit.

10. In banking and financial services, recent developments demonstrate the increased strength and stability of the industry as industry players prepare themselves for further liberalisation and deregulation. The risk-weighted capital ratio (RWCR) of the banking sector stood at 13.1 percent as at the end of the 1st quarter of 2007. The asset quality of the banking sector has also shown strong improvement. The total net non-performing loans continue to show a decrease with the net NPL ratio standing at 4.6 percent of net loans.

11. Malaysia's success has been the development of  a comprehensive Islamic financial system,  with Islamic banking  assets amounting to about 34 billion US dollars and accounting for 13 percent in terms of market share.  Islamic corporate bonds now accounts for almost half  of the total corporate bond issuance of 36 billion US dollars. The multinationals and multi-lateral institutions, such as the International Finance Corporation and the International Bank for Reconstruction and Development, have also tapped fund from the Malaysian capital market by issuing ringgit sukuks. This has contributed to the growth of the sukuk market in Malaysia, and at present two third of global sukuk issuance is originated in Malaysia.

12. In this regard, I am pleased to note that the CIMB Group has topped the global sukuk issuance league tables last year with a 28.5 percent market share while CIMB Islamic was named as the global Islamic Investment Bank of the Year for 2006 by The Banker, a publication of the Financial Times Business in the UK. 

Distinguished guests,

13. In concluding, I would like to wish CIMB New York greater success and a good beginning to its new venture in the United States of America. It is my hope that the CIMB Group will continue to play a major role in the initiatives to further develop our financial services sector, both in the domestic front and globally.
14. On this note, it now gives me great pleasure in officiating the launch of CIMB New York.  Thank you.

Ministry of Finance
Putrajaya
Malaysia

7 June 2007