Malaysia picks CIMB CEO as Finance Minister in new Cabinet

https://www.bloomberg.com: Malaysia’s prime minister picked the head of one the country’s main banks as his new finance minister Monday amid heightened global risks and domestic policy uncertainty.

CIMB Group Holdings Bhd Chief Executive Officer Zafrul Aziz will head the finance ministry under Prime Minister Muhyiddin Yassin, who replaced 94-year-old Mahathir Mohamad last week after a power struggle. 

Zafrul Aziz

Zafrul will be tasked with implementing a 20 billion ringgit ($ 4.8 billion) stimulus package to counter economic damage from the coronavirus outbreak. Growth in the Southeast Asian nation was slowing even before the virus, weakening to a decade low last year.

“The appointment of Zafrul Aziz, with his deep banking sector expertise -- and not a political appointee -- will be seen as PM Muhyiddin Yassin’s attempt to ensure fiscal credibility,” said Wellian Wiranto, an economist at Oversea-Chinese Banking Corp. in Singapore. It’s “a positive move, although it remains to be seen how he can quickly win market confidence at a time when fiscal stability may be threatened by the deep plunge in the oil price.” The ringgit fell 1% to 4.2165 per dollar, tracking losses in regional currencies after crude prices slumped.

The appointment comes a week after Malaysia’s central bank lowered the benchmark interest rate by 25 basis points to counter risks to the economy from the coronavirus outbreak. The Government recently revised down its economic growth forecast for this year to 3.2%-4.2%, from 4.8% previously, after last year’s expansion was the weakest in a decade. It also has widened the fiscal deficit target to 3.4% of gross domestic product, from 3.2% earlier, to accommodate the stimulus package.

Muhyiddin must balance the interests of lawmakers cobbled together from opposing factions. He’s backed by a Malay-majority party, a group of lawmakers from the former multiracial government, as well as a party advocating more autonomy for the eastern state of Sarawak. His new Government is set to face a no-confidence vote from Mahathir when parliament convenes 18 May.

Finance Minister Zafrul, 46, spent much of his career climbing the ranks at CIMB before becoming the group’s CEO in 2015. A senior investment banker, he previously worked at Citigroup Malaysia, Credit Agricole Group and local broker Kenanga Holdings Bhd. He holds a Master’s degree in economics and accounting from the University of Bristol and a bachelor’s degree in finance from the University of Exeter.