PETALING JAYA: CIMB Group's offer of an option to 36,000 staff across its offices in the region to take no-pay leave for up to six months has been received well by the employees.

CIMB Group chief executive Datuk Seri Nazir Razak said the move should not be viewed negatively and that the employees have responded positively with some asking for breaks of between one and six months.

"I think it is the most beneficial scheme for the staff and also for the company. Why should it  be seen negatively?

"It is up to the staff whether they want it. Secondly, it is also in the full knowledge that under the current economic conditions, there is spare capacity," Nazir told reporters on March 30 after witnessing the signing of a strategic alliance agreement between CIMB Wealth Advisors Bhd and composite insurer American International Assurance Bhd (AIA Bhd).

The scheme, known as the "Staff Rejuvenation Programme", takes effect on April 1 this year and involves CIMB employees in Malaysia, Thailand, Indonesia and Singapore, according to Nazir.

The option, which was announced via an in-house memorandum last week, comes at a time when weaker economic conditions and volatile financial markets globally have crimped the earnings of companies, which are cutting costs through various means.

Based on news reports, the memorandum has indicated that CIMB Group will not undertake a recruitment drive to replace employees who choose to go on leave under the scheme.

But redeployment of workforce within the group's various departments will be allowed. The document also highlights that employees returning after their break could be transferred to other departments with no changes to their employment grades and salaries.

CIMB's parent company Bumiputra Commerce Holdings Bhd (BCHB) saw its earnings for the financial year ended Dec 31, 2008 decline by 30.1 % to RM1.95 billion compared to a year earlier on lower earnings from its corporate and investment banking, besides treasury units.

This came against a backdrop of weaker capital market activity and widening of bond credit spreads, the firm told the exchange. BCHB's revenue was down 14.1 % to RM7.74 billion from RM9.01 billion during the year.

On March 30, CIMB Wealth Advisors struck a 10-year strategic alliance with AIA Bhd. This was the second deal between BCHB and an insurer this month.
 
About two weeks ago, BCHB via Commerce International Group Bhd (CIGB) sold a 49% equity stake in  PT Commerce International (PTCI), which was formerly known as PT Asuransi Jiwa John Hancock  Indonesia, to Sun Life Assurance Company of Canada for US$22.7 million (RM82.17 million).

PTCI will in turn enter into a bancassurance agreement with PT Bank CIMB Niaga Tbk for the distribution of life insurance products through CIMB Niaga's distribution network in Indonesia.

The CIMB Wealth Advisors-AIA collaboration, effective December 2008, will see CIMB Wealth  Advisors leveraging on AIA's insurance expertise. AIA will in turn tap into CIMB Wealth  Advisors' distribution channels, which include its more than 5,500 agents.

"We can leverage on each other's strengths to offer a range of differentiated insurance protection solutions," CIMB Wealth Advisors chief executive officer Tan Beng Wah said.

AIA Bhd CEO Khor Hock Seng said : "In this (current economic) landscape, more so, as a company,  we need to look for new distribution (channels)."

The Malaysian arm of AIA, which was formerly a branch of the regional headquarters in Hong Kong, is now locally incorporated and known as AIA Bhd. It is a composite insurer and last year Bank Negara gave it a license for international takaful or Islamic insurance licence.
 
The Hong Kong-based AIA Co announced earlier this month it had completed a corporate restructuring  to accommodate AIA entities in the Asia-Pacific under a separate legal entity from its embattled parent company American International Group Inc (AIG).
 
The separation offers clarity on the status of AIA group's global operations in the sense that the operations in the country are standalone and would not be affected by its parent company's problem.

This comes at a time when AIG has made global headlines in recent months as a recipient of a multi-billion dollar lifeline from the US government to prevent the company from  filing for bankcruptcy.