KUALA LUMPUR (BLOOMBERG) - RHB Bank, Malaysia's fourth-largest lender by assets, and AMMB Holdings 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 per cent in Kuala Lumpur trading this year, giving it a market value of RM15.7 billion (S$5.12 billion) as of Wednesday's (May 31) close, while RHB is worth RM21.6 billion.
Shares of both banks remain suspended after RHB and AMMB both requested a trading halt effective on 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 - after a plan for a three-way merger with CIMB and Malaysia Building Society Bhd. failed in January 2015.
Australia & New Zealand Banking Group would also be able to unload its 24 per cent 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 finalised and the extent to which the merger provides value to ANZ shareholders," a spokesman for the Melbourne-based bank said by e-mail.
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 US$15.9 billion (S$22 billion) of acquisitions targeting South-east Asian banks over the past three years, data compiled by Bloomberg show.
RHB will make an official announcement "in due course," a spokesman 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 per cent stake in Shanghai Rural Commercial Bank Co. for A$1.84 billion (S$1.88 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 in October.