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CIMB, RHB And MBSB Merger Creates Universal Bank With Multiple Competitive Advantages, Says IDC
International Data Corp (IDC) Financial Insights said the three financial institutions have their own strength with CIMB championing "super-regionalisation", a push by local Asia-Pacific banks to build a network of operations across several markets in the region.
"Alongside this bid for multi-jurisdictional expansion is the opportunity to build super-regional technology foundations, or information technology (IT) platforms that are integrated enough to viably support and grow the operations in multiple geographies," it said in a statement today.
It said CIMB was building towards its "1Platform" initiative, a five-year old programme which involved, among others, the creation of a single-core banking system with enough local market customisation capabilities and the formation of various centres of excellence for application development, delivery and production.
"The merger will be the first real test for how CIMB's years-long transformation stands to the tests of scalability and integrability, never mind that the three-way merger involves counter-parties with a largely-domestic footprint," it said.
IDC said RHB, on the converse, has been seen as the region's most successful IT-enabled growth stories in the past five years.
It said "Easy by RHB", which was a mass market banking proposition, was a feat attained through the use of low-maintenance branch models, revised account creation workflows and competitive loan pricing.
"Its other investments in consumer banking (particularly in cards and payments) also paid dividends," it said.
Meanwhile, IDC said MBSB was a well-diversified financial service provider, with strengths in property financing and corporate/wholesale banking even though without the high-profile technology successes of the other two players in the deal.
It said the potential merger between the three financial institutions would form one of the largest banks in Southeast Asia and could dislodge Maybank from the top spot as Malaysia's largest bank, and the fourth largest in Asean.
IDC said the merger might portend a race for size for banks not only within Malaysia but also within Asean especially in the context of the Asean Economic Community, which will begin in earnest next year.
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