PETALING JAYA: CIMB Group Holdings Bhd has denied media reports that it is mulling the privatisation of its Indonesian subsidiary PT Bank CIMB Niaga Tbk (CIMB Niaga).
In a statement today, the banking group stressed there was no formal proposal for the potential privatisation of CIMB Niaga and that no decision has been made.
“CIMB Niaga remains an integral part of the group’s regional footprint, and the group remains committed to its operations in Indonesia,” it said.
The statement was in response to news reports citing research analysts who attended a briefing led by CIMB chief financial officer Khairul Rifaie recently.
However, most post-briefing reports by research houses including its own research arm, CIMB Securities, noted the management was considering three key options for CIMB Niaga, Indonesia’s sixth largest bank by assets.
This included a placement of shares to strategic investors, a secondary offering, and crucially, privatisation leading to a potential delisting from the Indonesia Stock Exchange (IDX).
In a note, CIMB Securities said a privatisation is currently the “more strategic and credible option” out of the three.
In its post-briefing note, Public Investment Bank said CIMB is “exploring potential privatisation structures”, albeit at a preliminary stage with regulatory hurdles to overcome.
“CIMB currently owns a 92.4% stake in CIMB Niaga, and a full minority buyout is estimated at RM800 million,” it said.
CIMB, Malaysia’s second-largest bank by assets, has been evaluating the various options for CIMB Niaga amid challenges in meeting Indonesia’s minimum public shareholding requirements, compounded by the risk of MSCI downgrading Indonesia from “emerging market” to “standalone market” status.
MSCI’s warning of a potential downgrade of the country’s status to “standalone market” has resulted in a sharp sell-off in Indonesian stocks across the board.
“The group will continue to meet all applicable regulatory guidelines, including minimum free float requirements in a timely and structured manner,” CIMB said in its statement.
IDX and Indonesia’s Financial Services Authority had revised free-float regulations earlier this year, lifting the minimum public shareholding requirement to 15% for listed entities from 7.5% earlier, with effect from March 2026.
BIMB Research said CIMB Niaga previously planned to meet the country’s minimum free float requirements by increasing its public shareholding from 7.54% to 12.5% by March 2027 and further to 15% by March 2028.
However, the potential reclassification of the Indonesian equity market by MSCI could make it more challenging to achieve these free float targets within the prescribed timeframe, the research house said in a recent note.