CIMB, RHB and Malaysia Building Society are merging into Malaysia’s biggest mega-bank

Photo: CIMB group CEO Datuk Seri Nazir Tun Razak. – Berita Harian pic

CIMB Group Holdings Bhd (CIMB) is planning to take over and merge with RHB Campital Bhd and Malaysia Building Society Bhd, a move that would form the country’s largest banking group, according to sources familiar with the impending deal. 

The three companies, with a combined market value of slightly less than RM90 billion, seperately told  Bursa Malaysia that their trading would be suspended today. The three financial institutions would also apply to Bank Negara to begin the merger process.

Malaysian banks are required to obtain Bank Negara’s approval before being able to proceed with any merger negotiations. 

The merger of all three banks would create a mega-bank with total assets of RM597.3 billion at the end of last year, outstripping the current lead held by Malayan Banking Bhd (Maybank), which holds RM560.4 billion in assets, Bloomberg reports. 

Three years ago, CIMB, which is helmed by group CEO Datuk Seri Nazir Tun Razak, the Prime Minister’s brother, attempted to acquire RHB Capital. 

The Employees Provident Fund (EPF), the federal government’s pension agency, would come out as the major stakeholder if the merger comes to fruition, owning 25% of the resulting mega-bank. As it is, the EPF owns 14.5% of CIMB stock, 41.3% of CIMB Capital, and 65% of Malaysia Building Society.