By Jason Ng and P.R. Venkat

Malaysia's CIMB Group Holdings Bhd. said Friday it is planning to cut costs at its investment banking and equities divisions across the Asia-Pacific region as well as merge some of its units, following a year-long review.

The Malaysian bank accelerated its review of its operations after the collapse of an $18 billion three-way merger plan with smaller local rivals last month.

People with knowledge of the process said earlier that the internal restructuring could lead to job cuts and spur an exit from some unprofitable businesses and markets, including a cutback in investment banking. CIMB expanded its investment banking business outside its home country massively three years ago after buying the Asian equity operations of British bank Royal Bank of Scotland Group PLC. RBS had offices in Hong Kong, Singapore, and Australia, among others.

CIMB in its statement didn't disclose which businesses it plans to exit or where layoffs would take place, but Malaysia's second-biggest bank by assets said it intends to bring down its cost-to-income ratio to less than 50% in the next three years, as well as pivot its focus toward consumer banking, which it plans would contribute to about 60% of the group's income.

"We have grown aggressively over the years and have a fantastic platform and brand. However, we have weaknesses, and we can no longer depend on a high growth operating environment," Zafrul Tengku Abdul Aziz, acting group chief executive of CIMB said.

The Malaysian bank has one of the highest cost bases among the country's lenders. At the end of September, CIMB had a cost-to-income ratio of 58%. By the same measure, the cost-to-income ratio for Malayan Banking Bhd., Malaysia's largest bank, was about 50%, according to AllianceDBS Research.

The announcement comes just weeks after CIMB ended merger talks with two other Malaysian lenders-- RHB Capital Bhd. and Malaysia Building Society Bhd--that would have created one of Southeast Asia's largest banking groups. The deal was called off "in light of current economic conditions, " with the three banks saying they couldn't arrive at a value-creating transaction for all stakeholders. That deal would have propelled CIMB to the top of the country's crowded banking market, while creating a megabank with over $180 billion in assets. Malaysia is home to 27 local and foreign lenders, with thousands of branches competing for business in a nation of 30 million people.

The restructuring and potential cutbacks call into question the pan-Asian strategies of the region's banks in recent years.

Last month, emerging markets-focused Standard Chartered PLC said it was shutting its stock-trading and underwriting business and shedding thousands of mostly Asia-based retail banking jobs. Japan's Nomura, which bought Lehman Brothers' Asian and European operations in 2008, began scaling back on global ambitions a few years ago.

"We have taken a long hard look at our Asia Pacific Investment Banking presence and we'll have to recalibrate this. Given the realities of capital markets, we will look at reducing the overall investment banking operating cost by about 30% in 2015," Mr. Zafrul said.

CIMB's deal to buy parts of RBS's business almost three years ago gave the Malaysian bank some of the British lender's cash equities, equity capital markets and corporate-finance businesses in Asia with around 400 people. RBS began selling off global assets after getting bailed out by the British government during the 2008 financial crisis.

As part of the restructuring, CIMB said its current corporate banking, treasury and markets division, and investment banking division will be combined to form an integrated wholesale banking division. "The strategic review has been about identifying areas where we are but should not be, areas where we need to be better and areas where we are already strong," Mr. Zafrul said.

CIMB's net profit fell 16% in the third quarter to 890.3 million ringgit ($251.5 million) while its net interest margin, a measure of profitability from lending, fell 2.86% in September compared with 2.87% a year earlier. The company is due to report fourth-quarter earnings by end-February.

Write to Jason Ng at jason.ng@wsj.com and P.R. Venkat at venkat.pr@wsj.com

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