By Chan Quan Min
Three major financial services firms CIMB Group Holdings Bhd, Malaysia Building Society Bhd (MBSB) and RHB Capital Bhd have requested to be suspended from trading on Bursa Malaysia beginning Thursday, July 10, triggering talk of a merger which will likely see the formation of the largest financial group in the country.
Chinese language newspaper Oriental Daily speculated if this was the start of a “big consolidation wave” in an article posted on its website.
According to announcements made to the stock exchange, the three financial services firms have requested trading halts “pending a material announcement.”
CIMB, MBSB and RHB are related through a common shareholder in the Employees Provident Fund (EPF). The public pension fund holds a 16% stake in CIMB, 65% of MBSB and 41% of RHB.
State investment holding company Khazanah Nasional has a 30% stake in CIMB, Malaysia’s second largest bank by assets size.
CIMB Group CEO Nazir Abdul Razak last week announced he was swapping the CEO’s office for the Chairman’s beginning September.
RHB appointed in December last year Khairussaleh Ramli as its new CEO. Khairussaleh previously headed Maybank’s Indonesian unit.
A merger between MBSB and RHB has been rumoured for over a year now. A merger between the two is seen as a logical conclusion because the EPF has controlling stakes in both companies.
Should a full merger between the three eventuate, CIMB could fulfill a long held dream of overtaking Maybank to become Malaysia’s largest banking group.
CIMB Group has total assets of RM371 billion which together with RHB Capital’s RM191 billion, takes the combined total to RM562 billion. Including MBSB’s total assets of RM35 billion the total figure amounts to RM597 billion, pipping Malayan Banking’s RM560 billion as at the end of last year by 6.6%.
CIMB came into its current form though a series of banking mergers involving Bumiputra-Commerce and Southern Bank in 2005 and 2006 respectively. In recent years CIMB has been aggressively expanding in regional markets, calling itself an Asean bank.
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