CIMB GROUP HOLDINGS BERHAD (50841-W) (Formerly known as Bumiputra-Commerce Holdings Berhad) Harmony in Diversity Annual Report 2009 002 CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 Cover Rationale CIMB Group’s journey towards becoming Southeast Asia’s leading universal bank takes us through a diverse region with different landscapes, languages, cultures and flavours. While the differences are marked, they are never foreign; the diversity is harmonious and never discordant. Harmony in diversity forms a strong basis for the Group to be a truly Southeast Asian franchise, staffed by the region’s best talents and serving the region’s vast population. CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 003 Bold Stunning Vibrant Rich Rhythms Architecture Cultures Flavours 004 CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 Our Vision To be Southeast Asia’s Most Valued Universal Bank CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 001 Contents 002 Chairman’s Message 152 Corporate Information 008 Performance Review by Group Chief Executive 154 Boards of Major Subsidiaries 038 Statement on Corporate Governance 156 Corporate Organisation Chart 067 Audit Committee Report 158 Board of Directors 074 Statement on Internal Control 160 Board of Directors’ Profiles 082 Risk Management 172 Company Secretary’s Profile 092 Investor Relations 173 Group Management Committee’s Profiles 094 International Advisory Panel 183 Group Shariah Committee’s Profiles 095 Corporate Responsibility Highlights 188 Functional Divisions 098 Notable Deals 192 Our Alliances 110 Notable Achievements 194 Shareholders’ Statistics 122 Corporate Events 197 Top 10 Properties of the Group 136 Core Philosophies of the Group 198 Notice of Annual General Meeting 138 Corporate Profile 201 Statement Accompanying Notice of Annual General Meeting 140 Corporate Structure 208 Group Corporate Directory 141 Corporate History Proxy Form 002 CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 Chairman’s Message CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 003 Chairman’s Message “In true CIMB fashion, we aim not only to be big, but to be strong as well. Therefore, the vital next step for us is to ‘unify CIMB’ and to leverage the existing business, cultural and historical ties that we share as a strong foundation for a truly regional franchise.” Dear Shareholders, We entered 2009 amidst much uncertainty. The global financial crisis was still unfolding with global financial icons among its casualties and at best, the economic outlook was weak. Despite that, we at CIMB Group viewed this as a period of tremendous opportunity. We had just completed our universal banking footprint in the Southeast Asian countries of Malaysia, Indonesia, Singapore and Thailand, and with that, we had the largest retail banking network in Southeast Asia with 1,150 branches and about 36,000 employees. That platform would serve as a springboard for initiatives to achieve the Group’s vision “To be the most valued universal bank in Southeast Asia”. Nevertheless, we are well aware that size and scale are not the only measures of success, and in true CIMB fashion, we aim not only to be big, but to be strong as well. Therefore, the vital next step for us is to “unify CIMB”, and to leverage the existing business, cultural and historical ties that we share as a strong foundation for a truly regional franchise. Given the diversity of Southeast Asia in terms of political ideology, demographics, linguistics, culture and differing levels of growth and development, the task of unifying CIMB may appear to require a superhuman effort. But to say that would be to discount a key factor, namely that at an elemental level, Southeast Asians share many basic and fundamental similarities. 004 CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 Chairman’s Message 01 02 03 04 CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 005 Chairman’s Message 01 A wet market in Bangsar, a suburb of Kuala Lumpur 02 Ingredients for daily offerings for sale in a Denpasar market 03 Chillies for sale at a morning market in Chiang Mai 04 Tekka Market in Little India, Singapore I enjoy travelling and have visited many parts of the region, retail, to be serviced and supported by a regional financial for both work and leisure. Whenever I travel, visiting markets services group, in terms of their business requirements and is one of my favourite activities. Walking through the vibrant personal finances. markets, looking at colourful displays of local produce, experiencing the sounds and rhythms inherent in the market Then there is of course the part that I enjoy recounting best place, observing the interaction between vendors and – the inroads we are making in unifying the talented people customers and tasting the local delights only serve to affirm who make up CIMB Group across the region. These efforts my initial intuition, that wherever I may be in Southeast Asia, span many areas of the Group, and I would like to highlight though I am aware that it may not be home, but yet, it is a few of them to shareholders, particularly those relating somehow familiar. Although the place may feel different, it is to appointments to the Board, audit, compliance and risk never alien. I may not be able to speak the local language, management, learning and development, corporate social but I can communicate with the locals. The flavours may responsibility, sports and recreation, and even a singing taste new, and yet, they always appeal to my palate. Put competition! together, the photographs of the markets depicted here form a canvas of diversity, but yet, it is not discordant. It is At the Board level, we have diversified the Board of Directors harmonious. And I believe this reinforces our optimism that of the Group to include representatives from Indonesia and there is a common thread that runs through the lives of the Thailand. I would like to take this opportunity to welcome people of this region in the form of a shared heritage. my new colleagues, Pak Glenn Yusuf and Khun Wantanan Petersik, who both have extensive experience in banking and After having observed the many facets of on-going efforts finance in the region. Together with Mr Consing and Kudo- to create regional franchises in Southeast Asia, I am buoyed san, more than one-third of your Board today is made up of by the mutual goals, the shared values, the collective vision non-Malaysians, and the perspective that these colleagues as well as the commonality of the challenges of the people bring will certainly enhance the Group’s stature as a regional as these are all uniting factors. I am pleased to share my franchise. optimism with all shareholders, that there is indeed harmony in diversity, which sets a solid foundation to unify CIMB and In audit, compliance and risk management, the Group for us to become a strong regional franchise. organised for the first time, a Regional Compliance, Audit and Risk Conference which involved 70 members of our At the G2G level, almost 43 years ago in 1967, the 5 staff. This was a very lively conference (despite its title!), and founding members of the Association of South East Asian the discussion was very useful in enabling our staff from Nations (ASEAN) had recognised the need to formalise the each country to better understand the challenges faced by efforts to strengthen the existing bonds of regional solidarity one another. It was also good for our staff to find out that and cooperation in order to promote mutual interests and to many of the matters raised were in fact common issues address common problems. This vision was subsequently shared by all. In addition, my colleagues - Dato’ Zainal Abidin entrenched in the ASEAN Charter which sets out the basis Putih, Dato’ Hamzah Bakar, Datuk Dr Syed Muhamad Syed for the formation of an ASEAN Community by 2015. The Abdul Kadir and Tan Sri GK Rama Iyer - who form the Audit fact that CIMB Group’s regional network covers 4 out of the Committee have also helped to unite staff (albeit in terms 5 founding ASEAN members gives us great comfort that of the common apprehension over an Audit Committee our corporate goals reflect those of the governments in the visit) as they extended the coverage of their field visits to countries in which we operate. Indonesia and Singapore in 2009 and to Thailand in early 2010. These visits have been very useful for the Board to In terms of the demand for a regional franchise, we are also better understand issues faced on the ground throughout in line with our customers’ business objectives. Increasingly the Group. our customers are regarding ASEAN as a single market of 600 million consumers, and this is evidenced by the Learning and development has also been an important focus acceleration of indigenous companies expanding their area for unifying our workforce. This is emphasised from the operations across borders, and cross-border mergers and start as a joint orientation programme covers new recruits to acquisitions. This is also augmented by the growth of intra- the company from all 4 countries. We also extended cross- ASEAN travel among the citizens of ASEAN countries. There border staff placements to include management trainees is clearly a need for these customers, both corporate and in the region. The Group Chief Executive’s “Striving for 006 CIMB GROUP HOLDINGS BERHAD | Annual Report 2009 Chairman’s Message The CEOs for Thailand, Singapore and Indonesia – Subhak Siwaraksa, Mak Lye Mun and Arwin Rasyid – with the CIMB Star finalists Leadership Excellence” series also winged its way to Jakarta in November. The 9 finalists performed for an audience twice in 2009 where Dato’ Sri Nazir shared his experiences comprising the Group’s 340 senior managers across the with CIMB Niaga’s graduate trainees as well as middle region and before a panel of celebrity judges.