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3 Malaysian banks in merger talks

Three Malaysian banks, including CIMB Group Holdings, are in merger talks, which could create the country’s biggest lender and one of the largest in Southeast Asia. CIMB Group, run by the brother of Malaysia’s prime minister, Nazir Rajak, is in early discussions to combine with RHB Capital and Malaysia Building Society. The combined market value of the three banks would be around 90 billion ringgit ($29 billion), with a total asset value of $183.1 billion. One of the options being discussed is a share issue by CIMB to the shareholders of the other two banks, one of the people familiar with the matter said, though minority shareholders of RHB and Malaysia Buildings Society could be given a cash option as well. All three banks are listed on the Kuala Lumpur Stock Exchange. Currently, Malayan Banking, or Maybank, is the country’s largest bank, while CIMB is the country’s second-biggest. Together, the three banks could create an entity that may rival Singapore’s DBS Group Holdings, Southeast Asia’s largest bank by assets. DBS last year failed to complete a multibillion-dollar takeover of an Indonesian bank, and OCBC is close to finalizing a deal to buy Hong Kong family-owned bank Wing Hang Bank. DBS also bought the Asian private banking operations of France’s Société Générale this year. CIMB itself made big moves outside Malaysia a few years ago with the purchase of RBS’s cash equities business in Asia.

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