Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Malaysia's RHB, AmBank in merger talks to form bank worth $9 billion

Stock MarketsJun 01, 2017 10:50
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Malaysia's RHB Bank logo is seen at its branch in Kuala Lumpur

By A. Ananthalakshmi

KUALA LUMPUR (Reuters) - Malaysia's RHB Bank Bhd (KL:RHBC) and AMMB Holdings Bhd (AmBank) (KL:AMMB) said they will begin merger talks, in what could be the Southeast Asian nation's biggest banking deal and create a group worth about $9 billion (£7 billion) at current prices.

The banks have received the nod from the Malaysian central bank to commence the merger negotiations, they said in a joint statement on Thursday. The transaction is expected to be an all-share deal and the two banks have until Aug. 30 to exclusively discuss a deal, they said.

The potential merger would reinforce RHB's ranking as the fourth largest Malaysian bank by assets behind Maybank (KL:MBBM), CIMB Group Holdings (KL:CIMB) and Public Bank (KL:PUBM). AmBank is currently the country's sixth biggest bank.

Source told Reuters on Wednesday that RHB would be the acquirer in the potential merger. AmBank has a market capitalisation of 15.7 billion ringgit (£2.8 billion), while RHB has a market value of about $5.0 billion.

A full takeover at those price levels by RHB would put it above the 2006 acquisition of Southern Bank by Bumiputra-Commerce Holdings for $1.74 billion, making it the biggest Malaysian banking deal, according to Thomson Reuters data. Bumiputra-Commerce eventually became the current CIMB Group after a series of mergers and a rebranding exercise.

Trading in shares of RHB and AmBank were suspended, ahead of the announcement.

In a research note ahead of the merger announcement, UOB Kay Hian analyst Keith Wee Teck Keong said RHB's shares are likely to react negatively to the announcement as the revenue synergies between the two groups are not compelling.

"We opine that such a merger would require a fair degree of cost rationalisation given the degree of operational and revenue duplication between AMMB and RHB," he said.

ANZ Banking Group (AX:ANZ), which owns a 24 percent stake in AmBank, has been weighing a sale of its stake since early last year, partly due to AmBank's involvement in a political scandal linked to state fund 1Malaysia Development Berhad and Prime Minister Najib Razak, sources have said.

Najib has been buffeted by allegations of graft and financial mismanagement at 1MDB and in particular by revelations of the transfer of hundreds of millions of dollars into his AmBank accounts in 2013.

Najib has denied any wrongdoing and said he did not take any money for personal gain. 1MDB is the subject of money laundering investigations in at least six countries, including the United States, Singapore and Switzerland.

In 2015, AmBank was slapped with a 53.7 million ringgit fine by the Malaysian central bank for breaching certain financial regulations.

Malaysia's RHB, AmBank in merger talks to form bank worth $9 billion
 

Related Articles

Didi Prepares U.S. Delisting, Hong Kong Share Debut
Didi Prepares U.S. Delisting, Hong Kong Share Debut By Bloomberg - Dec 03, 2021

(Bloomberg) -- Didi Global Inc. has begun preparations to delist in the U.S. and will start work on a Hong Kong share sale, the company announced on its Weibo (NASDAQ:WB)...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Aaron Lim
Aaron Lim Jan 29, 2021 1:13
Saved. See Saved Items.
This comment has already been saved in your Saved Items
this news is seen 2017 hmm...
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email