Mega bank merger called off
The proposed merger between CIMB Group Holdings Bhd and two smaller Malaysian lenders to create one of the largest banks in Southeast Asia has been cancelled, sources said.
CIMB’s merger with RHB Capital Bhd and Malaysia Building Society Bhd (MBSB) was expected to make it the world’s largest Islamic bank.Board members of the banks will meet tomorrow where the deal will be called off, the sources said, adding that an announcement will be made by the end of the week.
The merger with RHB Capital Bhd and Malaysia Building Society Bhd (MBSB) was expected to create a banking group with assets of about US$190 billion (RM677.05 billion), exceeding Malayan Banking Bhd and making it Southeast Asia’s fourth-biggest bank.
The multi-billion dollar state-backed deal was part of Malaysia’s ambitious plan to promote its firms as regional champions and also create the world’s largest Islamic bank.
“There is no further development in relation to the merger at this juncture. Further updates will be made should there be any development,” RHB said in a statement. CIMB and MBSB declined to immediately comment.
Sources had said earlier this week that RHB was seeking new terms of their share exchange, and possibly cash, after shares in CIMB skidded 26% since the merger was first announced on October 9, making the deal unattractive.