Three Malaysian banks announced their plans to merge to establish the largest commercial lender and Islamic bank in Malaysia mid 2015, with a capital of USD 21 billion.
CIMB Group holdings Berhard, the second largest lender in the country, said late Thursday that they are negotiating with members of the RHB Capital Berhard (the fourth largest) and Malaysia Building Society Berhard to complete all steps needed to execute the project.
CIMB and RHB will merge via a share swap, the two banks announced in a joint statement. The two banks' Islamic units will then acquire Malaysia Building Society to form a mega Islamic bank, the statement added.
Islamic banking in the country would prominently develop, once the deal to combine the three banks was successful. Experts said that the combined entity would be the fourth largest in the region, after DBS Group Holdings, Oversea Chinese Banking Corp. and United Overseas Bank.
The three banks, which own about USD 191 billion of assets, had received approval from the Malaysian authorities to execute the combining project. Malaysia aims to allow Islamic banks to own 25 percent of assets by the year 2017.