4 Malaysia Banks Miss Deadline
KUALA LUMPUR, Malaysia (AP) _ Malaysia’s central bank on Sunday announced that 50 of the country’s 54 banking institutions have been merged into 10 banking groups.
In a statement, the bank said only four banking institutions had not met the Dec. 31 deadline for the massive financial sector restructuring.
Of the four, merger talks between the Arab-Malaysian and Utama banking groups were believed to have stalled over disputes about pricing and control. Multi-Purpose Bank Bhd. and MBf Finance Bhd. also missed the merger deadline.
Analysts have said that a delay in the target date would hurt sentiment in the banking sector and heighten investor concerns over issues like sluggish loans growth.
In July 1999, the central bank said it would merge Malaysia’s financial institutions into six financial groups. After resistance from some banks, Prime Minister Mahathir Mohamad agreed to let banks choose their own partners while the central bank approved 10 anchor banking groups.
The government says the streamlining is needed to make the industry strong enough to compete with big foreign banks before the sector is liberalized in 2003.