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December 27, 2008

Malaysian bank raises $287m tier 1 capital
Malaysia's second-largest lender CIMB Bank has raised 1 billion ringgit ($287.4 million) of Tier 1 capital via a private placement after obtaining the approval of the central bank for a 4 billion ringgit fundraising plan, reported Reuters.

Bumiputra-Commerce, the holding company of CIMB Bank, said in a filing to the stock exchange on Friday that the Tier 1 stapled securities issuance programme will comprise of non-cumulative perpetual capital securities to be issued by CIMB Bank and subordinated notes to be issued by Commerce Returns Bhd, a wholly-owned subsidiary of CIMB Bank.

The proceeds from the programme will be used for CIMB Bank's working capital and general banking purposes, it said.

Asian banks, although have been relatively unaffected by the global financial crisis, are making moves to beef up their balance sheets as they expect tough operating environment ahead amid a global economic slowdown.

Earlier this week, DBS Group Holdings, Southeast Asia's biggest lender, said it would raise S$4 billion ($2.7 billion) through a rights offering.

Analysts said big Malaysian banks such as top lender Maybank and third-ranked Public Bank may have to raise fresh capital in order to shore up their core capital following aggressive expansion in 2008.

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