* Net profit dropped 10 pct, Indonesian unit weighs
* Bank says Indonesia remains its biggest challenge
* Tengku Zafrul Aziz steps in as acting CEO
* Shares down 0.5 pct after earning
(Recasts and adds new acting CEO)
KUALA LUMPUR, Aug 29 CIMB Group Holdings Bhd
, Malaysia's second biggest lender, said quarterly net
profit slid 10 percent on a weak performance in Indonesia, and
named its head of investment banking as acting CEO.
Tengku Zafrul Aziz, who was poached from archrival Malayan
Banking Bhd (Maybank) last year, will take on the top
position from Sept. 1. Current CEO Nazir Razak will become
chairman as previously announced.
It was CIMB's fifth straight quarter of year-on-year profit
decline and the result comes after Maybank booked its lowest
quarterly profit in a year, hampered by a dearth of IPO and
In Indonesia, charges for bad loans have risen and the value
of the rupiah has fallen. CIMB's net profit for the second
quarter dropped to 949.9 million ringgit ($300 million) while
revenue was flat at 3.4 billion ringgit, it said in a statement.
First-half net income slid 17 percent to 2.02 billion
"Indonesia will remain the biggest challenge in the second
half due to prevailing economic and liquidity factors," CIMB
said in a statement.
CIMB is in talks with smaller local rivals RHB Capital
and Malaysia Building Society on a planned
mega merger to become Malaysia's largest banking group,
RHB, Malaysia's fourth-largest lender by assets, is
discussing the sale of its investment banking unit if the merger
proceeds, people familiar with the plan said on Thursday.
CIMB has boosted its regional operations over the past
decade and expanded its investment banking capabilities by
acquiring parts of Royal Bank of Scotland's Asia
operations outside Japan.
Shares of CIMB were down 0.5 percent while the broader index
fell 0.2 percent.
(1 US dollar = 3.1560 Malaysian ringgit)
(Reporting by Yantoultra Ngui and Al-Zaquan Amer Hamzah;
Editing by Edwina Gibbs)