RHB Bank, AMMB get Bank Negara's nod for merger talks

PETALING JAYA: Talk of a proposed merger between RHB Bank Bhd and AMMB Holdings Bhd have finally come true with the central bank granting approval to them to begin discussions.

It will be effectively an all-share deal, according to filings with Bursa Malaysia.

The two banks said they have entered into an exclusivity agreement to negotiate and finalise terms and conditions of the proposed merger, including pricing, structure, and others, for submission to the relevant regulatory authorities.

This follows a Bank Negara Malaysia letter dated June 1 which stated that it has no objection to the two banking groups exploring a possible merger of their businesses and undertakings. The approval lasts until Nov 30, 2017.

Meanwhile, the exclusivity agreement will go on for three months with the expiry date on Aug 30, 2017.

If the merger goes through, it will create the fourth largest banking group in Malaysia by market capitalisation.

Based on yesterday's closing, the combined market capitalisation of RHB and AMMB was RM37.32 billion, behind Malayan Banking (RM96.78 billion), Public Bank (RM77.8 billion) and CIMB Group Holdings (RM58.84 billion).

RHB Banking Group managing director Datuk Khairussaleh Ramli said he is confident that if the proposed merger takes place, it will create greater synergy for the enlarged banking group, benefiting its shareholders, customers, employees and all other stakeholders.

“A merger of RHB Banking Group and AmBank Group will create a stronger fourth largest banking group, creating scale and market leadership across key business segments,” he noted.

Meanwhile, AmBank Group CEO Datuk Sulaiman Mohd Tahir is positive that a merger will create a stronger business and financial presence.

“This new chapter that is opening in the AmBank Group’s history, comes at a opportune time for us as we have been moving closer to achieving our Top 4 goals.
“Our combined strength in key business segments particularly in retail and investment banking will bode well for us as we move forward to achieve our goal of becoming a formidable banking group,” he said.

Trading in RHB Bank and AMMB shares resumes today.