Malaysia's second-largest banking group, Commerce Asset-Holding, announced a sweeping restructuring plan today as it prepares to become a regional player with a major offshore expansion.

The new expanded group will have combined assets of about RM100 billion compared with the current RM15 billion, officials said.

Under the restructuring scheme, a new unit, CIMB Newco, will acquire Commerce Asset-Holding's wholly owned Bank Bumiputra-Commerce Bank as well as publicly-listed investment house CIMB Bhd which will be de-listed from Malaysia's bourse.

CIMB chief Nazir Razak told a news conference that the restructuring will put the banking group in a strong position to make acquisitions both in Malaysia and regionally.

"We could focus on building up our presence in Singapore and Indonesia or buy a bank in Thailand," he said.

The move offshore is in line with the ambitions of Khazanah Nasional, the Malaysian government's investment arm, which owns nearly 23 percent of Commerce Asset.

Regional dominance

Malaysia aims to transform Khazanah into an investment giant in Southeast Asia and has started to aggressively pursue overseas acquisitions.

"Certainly this fits in with Khazanah's own objective of having a banking group to act as its springboard for regional dominance," said AmResearch executive director Gan Kim Khoon.

"Commerce Asset can now approach the regional markets with a common view and also with a much stronger balance sheeet to compete with the other regional banks such as DBS (of Singapore) and HSBC," Gan said.

Currently, state-controlled Commerce Asset-Holding owns 71.29 percent of Commerce International Merchant Bankers as well as 52.8 percent of Indonesias eighth-largest bank, PT Bank Niaga.

Nazir said that all of Commerce Asset-Holding's banking businesses will eventually assume CIMB's brand name, while Commerce Asset-Holding will become known as Bumiputra-Commerce Holdings Bhd.

The new group's assets will still rank behind Malayan Banking, the country's biggest lender which has assets totalling RM160 billion and has embarked on a regional expansion plan.

"We hope to overtake Maybank one day," Nazir said.

Gan said Nazir might have been alluding to the possibility that it will make a domestic acquisition in the future in order to catch up with Maybank.

"This will give them the size they would seek for them to grow organically," he said.