Photographer: Sanjit Das/Bloomberg

RHB Bank, AMMB Said to Seek Central Bank Nod for Merger Talk

Updated on
  • Malaysia’s fourth-largest lender seen seeking to bulk up
  • Shares of both banks suspended pending announcements

RHB Bank Bhd., Malaysia’s fourth-largest lender by assets, and AMMB Holdings Bhd. are planning to pursue talks to merge, people with knowledge of the matter said.

The two Malaysian lenders have submitted an application for central bank approval to start formal negotiations, the people said, asking not to be identified because the information is private. Shares of AMMB have risen 21 percent in Kuala Lumpur trading this year, giving it a market value of 15.7 billion ringgit ($3.7 billion) as of Wednesday’s close, while RHB is worth 21.6 billion ringgit.

Shares of both banks remain suspended after RHB and AMMB both requested a trading halt effective Thursday morning, pending announcements.  

RHB is seen to be reviving its attempt to grow -- and create a more level playing field with competitors Malayan Banking Bhd. and CIMB Group Holdings Bhd. -- after a plan for a three-way merger with CIMB and Malaysia Building Society Bhd. failed in January 2015. Australia & New Zealand Banking Group Ltd. would also be able to unload its 24 percent stake in AMMB as it seeks to refocus on its domestic lending market.

"ANZ looks forward to considering the details of the merger proposal once finalized and the extent to which the merger provides value to ANZ shareholders," a spokesman for the Melbourne-based bank said by email.

Malaysia’s central bank has been encouraging consolidation among local lenders to help create larger entities that can better compete on a regional level.

ANZ Offloading

Malaysia’s central bank has been encouraging consolidation among local lenders to help create larger entities that can better compete on a regional level.

Any deal would add to the $15.9 billion of acquisitions targeting Southeast Asian banks over the past three years, data compiled by Bloomberg show.

RHB will make an official announcement “in due course," a spokesperson said. Representatives for AMMB and the Malaysian central bank declined to comment.

ANZ has been seeking to off-load its stake in AMMB as part of a strategic sell-down of its legacy Asian operations.

In January, ANZ said it would sell its 20 percent stake in Shanghai Rural Commercial Bank Co. for A$1.84 billion ($1.36 billion) to China Cosco Shipping Corp. and Shanghai Sino-Poland Enterprise Management. It also sold retail and wealth-management businesses in five Asian markets to Singapore’s DBS Group Holdings Ltd. in October.

— With assistance by Joyce Koh, and Emily Cadman

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