Foreign funds buy most of MUFG’s block of CIMB shares

PETALING JAYA: Foreign fund managers are the buyers of the bulk of shares in CIMB Group Holdings Bhd that had been offered up for sale by Mitsubishi UFJ Financial Group (MUFG).

According to a source familiar with the deal, two-third of the block of 412.5 million CIMB shares had been taken up by foreign shareholders.

“These are fund management companies,” the source told StarBiz.

The source, however, declined to divulge further details on buyers of MUFG’s block of CIMB shares.

CIMB yesterday announced that MUFG’s wholly-owned subsidiary, the Bank of TokyoMitsubishi UFJ Ltd, had sold its entire stake of 412.5 million CIMB shares (equivalent to a 4.6% stake) via an overnight block trade.

Stock market data showed the block of shares had crossed yesterday at RM6.20 apiece, representing a discount of 4% to CIMB’s closing price of RM6.46 on Tuesday

CIMB said in a statement: “The divestment was part of MUFG’s strategic global master plan which included a review of its portfolio of existing investment in affiliates.”

“Notwithstanding the divestment, both MUFG and CIMB would maintain their current collaboration founded on a mutually beneficial 40-year partnership,” it added.

CIMB’s shares continued its third consecutive day of decline yesterday, falling 15 sen to close at RM6.31.

MUFG’s presence in Asia and Oceania spanned 15 countries, including Malaysia.

CIMB noted MUFG’s capital investment in the second-biggest banking group in Malaysia by assets, which was made in various stages from 1974 onwards, had enhanced the Japanese banking group’s presence in the country.

Responding to MUFG’s exit, CIMB group chief executive Tengku Datuk Seri Zafrul Tengku Abdul Aziz said: “We have had a mutually rewarding relationship over the last 40 years and while MUFG’s capital priorities have necessitated this move, I am confident our relationship will remain strong. We will continue to be trusted business partners and look forward to further develop our collaboration in complementary areas.”

Separately, MUFG’s CEO for Asia & Oceania Takayoshi Futae said the group, as a global financial institution rooted in Asia, remained a committed partner to Malaysia’s growth.

“Over the years, our alliance with CIMB has deepened and we found ourselves collaborating broadly on areas ranging from Islamic finance and trade finance to infrastructure projects.

“This foundation of mutual respect and partnership will not change, and we will continue to explore further ways to grow in Malaysia with CIMB’s support, as well as to help them expand using MUFG’s global resources and network,” Futae said.

The group saw its net profit grow 35.3% year-on-year (y-o-y) to RM2.28bil, or 25.56 sen per share, with an annualised return on equity of 9.9%, in the first half ended June 30, 2017. During the period in review, its revenue rose 13.8% y-o-y to RM8.68bil.