Tuesday, March 31, 2009

6 Months Leave in CIMB Group

On 5 Mar 2009, the central bank's bank governor mentioned the following:-

"Several years of reforms, institutional development and capacity building, continuous efforts to enhance corporate governance and risk management standards and practices have significantly strengthened Malaysia’s banking system”

On 30 Mar 2009, CIMB Group, that owned the country's second largest financial group, initiated a Staff Rejuvenation Programme and its chief executive mentioned the following:-

"urged its staff to go on unpaid leave for up to six months in a move to cut costs because of the global economic downturn. The offer to its 36,000 staff was aimed at avoiding layoffs and would involve employees across nine countries, including Indonesia, Thailand and Singapore."

Funny programme name. Is it to rejuvenate the staff or the company itself?

CIMB Group's latest 2008 financial press release:-
Revenues declined by 14% while net profit declined by 30% compared to 2007. However, adjusting for M&A-related charges, the Group’s net earnings declined by 2.6% from RM2,119 million to RM2,064 million.

Net profit of RM1.952 billion for FY08 with earnings per share of 57.8 sen and net Return on Equity of 12.3%, below its 16% target but within analysts’ current expectations.

The company has declared an interim 25 sen dividend per share amounting to a total net payment of RM699.4 million, comprising 20.7 sen (less tax) and 4.3 sen tax-exempt.

They are still doing well despite the current economy unless they expect to go into losses in the coming year. That would be drastic then. Earning so much but yet said that the programme being implemented was to cut costs?


Cost to income ratio went up from 46.9% to 53.2% (from 50.3% to 52.0% after adjusting for M&A-related charges). Overhead expenses declined by 2.5% (5% excluding ex-Lippo Bank) year on year. Meanwhile, personnel costs (excluding merger costs and ex-Lippo Bank) dropped by 11%.

Cost is the main factor here and that shows cost of living in Malaysia is increasing rapidly even though the petrol price has gone down a lot. The Malaysian government tried to reinforce the economy by first introducing a RM7 billion stimulus package in Nov 2008 . Four months later in Mar 2009, it was reported that this package was not fully distributed. Only 76% of the stimulus package has been disbursed!

Just this month, the Malaysian government has announced another RM60 billion stimulus package to avoid recession. This time it's called to avoid recession ....... no more to reinforce the economy. It's different meaning altogether.

But is the second stimulus package helping each and every single Malaysian? Last I read is that this RM60 billion package is over a two years period .........................

Where is Malaysia heading to?

Generally I felt that those people high up in the corporate levels or government rankings won't be able to see or feel what the general public is facing.
Tags: Malaysian Economy, CIMB Group, Staff Rejuvenation Programme

Labels:

0 Comments:

Post a Comment

Links to this post:

Create a Link

<< Home

>