Bidding war may begin for Malaysia’s RHB
Malaysia’s central bank grants approval for CIMB and Maybank to begin acquisition talks with RHB with the potential to result in the creation of the biggest bank in the South East Asian region. June 01, 2011 | Timothy ShimAs Malaysia’s central bank grants more and more licenses to foreign banks for operation in the country, domestic banks are scrambling to build up strength in order to compete with these global players. Currently the spotlight is on CIMB and Maybank, both of which have received approval from Bank Negara Malaysia (BNM) to commence negotiations with RHB for merger. BNM’s approval could prove ground-breaking, as any successful merger between these entities has the potential to create what could be the biggest bank in South East Asia. If CIMB were to successfully acquire RHB, the total combined capitalization of the result would amount to a an estimated $27.3 billion, while a Maybank win would push that figure up to $28.8 billion, running past existing region big boy DBS’s $27.7 billion. Maybank is currently Malaysia’s strongest in terms of both asset and market value, although it still lags behind CIMB in international investment banking operations. Although a Maybank-RHB merger would be in-line with Maybank’s vision to be a regional financial services provider, experts say that such a merger would result in duplication of assets in terms of branches, and that a CIMB-RHB merger would be more logical. RHB itself is open to the idea of a merger although it does not seem to be in too much of a rush to make a decision. According to Azlan Zainol, chairman of RHB’s banking unit, “RHB will consider all proposals that are beneficial to shareholders”. What is fairly certain is that some results will be seen within the next three months, before BNM’s approval for merger talks expires. With such high stakes at hand there is little doubt about how hard this fight is going to be. Other domestic banks in Malaysia have already been beefing up their assets, such as with the recent EON Capital acquisition by Hong Leong Bank, to fend of international competition. Both Singapore and Malaysia have seen a consolidation of domestic banks since... Please login to read the complete article. If you already have an account, you can login now or subscribe/register.
Categories: Capital & Strategic Issues, Malaysia, Mergers and Acquisitions, Risk and Regulation, SingaporeCapital & Strategic Issues,Malaysia,Mergers and Acquisitions,Risk and Regulation,Singapore, Capital & Strategic Issues,Malaysia,Mergers and Acquisitions,Risk and Regulation,Singapore, Keywords:BNM, CIMB, Maybank, RHB BNM, CIMB, Maybank, RHB
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