3 Malaysian banks axe plans for merger
KUALA LUMPUR, Malaysia (AP) — Three Malaysian lenders said Wednesday that a proposed merger that would have created the country’s biggest bank has collapsed after they failed to agree on terms amid a deteriorating economic outlook.
The country’s No. 2 bank, CIMB Group Holdings Berhad, along with fourth largest lender RHB Capital Berhad and Malaysia Building Society Berhad last year announced plans to combine their businesses via a share swap.
It would have created Malaysia’s top bank and one of Southeast Asia’s largest, as well as a mega Islamic bank.
Share prices of all three lenders have slid since the deal was announced in October while the plummeting oil price is hurting Malaysia’s economy. A weakening economic outlook also dampens loan growth and bleakens prospects for the banking industry.
The three lenders said in a joint statement they had ceased discussions as the proposed deal cannot create value for them amid current economic conditions.
“While we remain convinced that the combination of our three franchises follows sound strategic logic, we ultimately were not able to arrive at a value creating transaction for all stakeholders,” said CIMB’s acting CEO Tengku Zafrul Tengku Abdul Aziz.