CIMB Bank to buy 16 properties for RM209.8 mil from major shareholder EPF

• The properties are part of 24 properties that CIMB Bank has been leasing from EPF under a sale and leaseback agreement dated Dec 30, 2009, which is set to expire on June 30 this year.

KUALA LUMPUR (May 2): CIMB Group Holdings Bhd's (KL:CIMB) wholly owned CIMB Bank Bhd will buy 16 properties that it is currently leasing from the Employees Provident Fund Board (EPF) for RM209.81 million, cash.

The properties are part of 24 properties that CIMB Bank has been leasing from EPF under a sale and leaseback agreement dated Dec 30, 2009, which is set to expire on June 30 this year, according to CIMB Group in a bourse filing Friday.

CIMB Bank entered into 16 sale and purchase agreements (SPAs) with EPF on Wednesday to acquire the 16 properties—spread out across Kuala Lumpur, Selangor, Johor, Perak, Pahang, Terengganu, Kelantan, Sabah, Sarawak and Labuan—leading to the termination of the existing lease agreement.

In addition to the purchase, CIMB Bank committed to potentially repurchasing the remaining eight properties that EPF might be unable to sell to third parties, which was provided for in the terms of the original lease agreement.

The purchase consideration of RM209.8 million was determined based on an independent valuation conducted by Raine & Horne International Zaki + Partners Sdn Bhd. As of Dec 31, 2024, the total net book value of the 16 properties stood at RM91.84 million, while their original investments totalled RM157.33 million on Dec 31, 2009.

The acquisitions will be funded through CIMB Bank's internally generated funds. They are also conditional upon obtaining consent from the relevant state authority and/or approval from the Ministry of Economy in six to nine months from the date of the SPAs, with a possible automatic extension of three months or as mutually agreed upon. The transactions are expected to be completed between the fourth quarter of 2025 and the first quarter of 2026.

CIMB Group said the repurchase of these properties, originally part of a 15-year sale and leaseback arrangement, will be retained for use in CIMB Bank's ongoing banking business. The transaction also supports CIMB Bank's strategy and will provide a favourable profit and loss uplift to the bank in 2025.

EPF, which is selling the properties, is a major shareholder of CIMB Group with a 17.78% stake.

CIMB Group said its audit committee and board of directors have reviewed the transaction and are of the opinion that its terms are fair, reasonable, on normal commercial terms, and not detrimental to the interests of the group and its minority shareholders.

CIMB Group's shares rose three sen or 0.4% to close at RM7.15 on Friday, giving the group a market value of RM76.8 billion. Year to date, the stock is down 12.05%.

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