CIMB Group explores privatizing Indonesian subsidiary amid market turbulence

CIMB Group Holdings Bhd is assessing a privatisation of its Indonesian arm, CIMB Niaga, after market volatility weakened the outlook for a secondary offering. The bank also contemplates placing shares with strategic investors as it seeks to meet revised Indonesian free-float requirements that limit its ownership to 87.5% by March 2027 and 85% by March 2028. Concerns over a potential MSCI downgrade of Indonesia have triggered a broad equity sell-off, further discouraging new share issues.

Public Investment Bank Bhd analyst Wong Ling Ling described the privatisation idea as still at a preliminary stage with regulatory hurdles ahead. PublicInvest estimates the buy-out could cost roughly RM800 million, while Hong Leong Investment Bank notes that a privatisation could streamline ownership and give CIMB more strategic flexibility, though it may still require capital deployment.