CIMB, two others "seek merger to create Malaysia's biggest bank"


KUALA LUMPUR (Reuters) - CIMB Group Holdings, Malaysia's second largest bank, is seeking to acquire two other lenders to create the country's biggest bank, media reports said.

Shares in CIMB, RHB Capital, the nation's fourth largest bank, and Malaysia Building Society were halted on Thursday, pending the release of a material announcement.

The reported merger comes ahead of a planned economic integration of Southeast Asian economies next year, with countries in the 10-nation alliance keen to build national champions to bolster their banking systems.

Analysts said such a deal would put pressure on Maybank, the nation's biggest bank, to acquire a rival.

"This could be a prelude to another megabank, I don't discount that Maybank would still want to be the largest banking group - not just in Malaysia but also the regional pursuit. They want to be a key player," said Ei Leen Tan, an analyst with Affin Investment.

The Employees Provident Fund will play a significant role in the merger as it owns big stakes in all three firms, said the Star newspaper.

This will give impetus to other countries in the region to think of something similar," said a M&A banker who advises on bank deals.