Malaysia's No. 2 bank in talks with SMC for possible investment in Bancommerce

MANILA, Philippines - Malaysia’s second largest bank, CIMB Group Holdings Bhd, said discussions with Philippine conglomerate San Miguel Corp. (SMC) for a possible investment in medium-sized lender Bank of Commerce are “currently at an early stage.”

At the same time, San Miguel corporate information officer Ferdinand Constantino told the Philippine Stock Exchange yesterday that an appropriate disclosure would be made in the event material developments result from such discussions.

San Miguel’s property arm San Miguel Properties Inc., and the group’s retirement fund hold a combined stake of nearly 70 percent in in Bank of Commerce, which had P90.7 billion in total assets and 122 branches as of June 30, 2011.

A partnership with CIMB would give San Miguel a wider footprint in Southeast Asian markets.

Headquartered in Kuala Lumpur, CIMB Group has presence in 14 countries, covering ASEAN and major global financial centers, as well as countries in which its customers have significant business and investment dealings.

With over 39,000 employees, CIMB reaches 81 percent of the ASEAN population, representing 89 percent of the region’s gross domestic product.

Last August, San Miguel entered into an agreement to acquire ExxonMobil Corp.’s 65 percent stake in Esso Malaysia Bhd. It said it might spend as much as $1.2 billion to upgrade Esso’s oil refinery and renovating gasoline stations.

San Miguel has been aggressively moving away from its traditional food and beverage business, engaging in a string of acquisitions in the infrastructure and power sectors.

Last week, CIMB acquired 70 percent of Thai broker Sicco Securities Pcl for $25 million from The Siam Industrial Credit Pcl.

CIMB had also planned to acquire RHB, Malaysia’s fifth-largest lender, in June but backed out after Abu Dhabi Commercial Bank sold its stake in RHB.