KUALA LUMPUR: CIMB Group Holdings Bhd is in talks with several parties to sell a majority stake in its bad-bank unit Southeast Asia Special Asset Management Bhd (Seasam).

Its group CEO Datuk Seri Nazir Razak said CIMB believed there is profit to be made in Seasam over time, and the banking group is keen to divest the non-performing loans (NPL) in Seasam to global NPL recovery specialists.

"We are open to suggestions. It may be one partner or more but we are comfortable at selling 51% stake in Seasam," Nazir told a group of reporters over a luncheon meeting.

He added that, in the future, Seasam also could acquire bad debt from other banks, including from its Thai operations CIMB Thai.

Nazir said CIMB Thai is looking at selling RM300 million of NPLs in net book value to Seasam.

In August 2008, CIMB sold RM1.1 billion worth of NPLs to South Africa-based Standard Bank, from which it gained RM106 million, or 20 sen on every RM1 worth of the NPLs.

Nazir said CIMB Bank Bhd’s new management team inherited about RM14 billion in legally claimable bad debts from its predecessor banks, Bumiputra-Commerce Bank and Southern Bank, with a net book value of RM4.8 billion.

“Our strategies for reducing NPLs have been hugely successful, with net book value of NPLs declining to RM2.3 billion or 52% in less than three years. CIMB Bank’s gross and net NPL ratios [excluding CIMB Thai] have been brought down to 5.2% and 2.2% as at September 2009,” he said.

CIMB Bank signed an NPL sale agreement to dispose of most of its legacy NPLs comprising 45,000 accounts with a gross loan amount of RM8.4 billion and net book value of RM928 million to Seasam on Dec 17.

The bank said the majority of NPLs originated from the retail-consumer segment and dated back to the late 1990s. While the portfolio was written down to RM928 million, its total collateral value was about RM2.1 billion, it added.

“This corporatisation exercise is a logical next step that will enable the complete segregation and transparency of the ‘good bank’ moving forward. It will result in CIMB Bank’s gross and net-NPL ratios dropping to 2.8% and 1.3% respectively, far superior to Malaysian industry averages,” Nazir said.