KUALA LUMPUR (Aug 3): RHB Capital Bhd (RHBCap) said there is currently no plan to enter into merger discussions with AMMB Holdings Bhd (AmBank Group).

The fourth largest lender in the country was responding to a New Straits Times report today that it may revisit earlier plans to merge with AmBank Group — the nation’s fifth largest lender by asset.

"It is business as usual at RHB and we will continue to focus on improving our fundamentals," RHBCap said in a statement today.

digitaledge Weekly had reported in its latest issue, citing sources, that the potential merger between RHBCap and AMMB has been put on hold, due to the current political headwinds.

A source familiar with the matter told digitaledge Weekly that the initial plan was to merge the two groups in a share swap, valued at about US$10 billion (RM38.25 billion), under which RHBCap would be the acquirer.

AmBank Group has long been viewed as a potential merger and acquisition (M&A) candidate, because of the possibility that its two largest shareholders, apart from the Employees Provident Fund (EPF), may eventually exit.

The two largest shareholders in AmBank Group are Australia and New Zealand Banking Group Ltd (ANZ) with a 23.78% stake, and founder cum chairman Tan Sri Azman Hashim with a 12.97% stake held through AmCorp Group Bhd. EPF owns a 16.4% stake.

The retirement fund, meanwhile, is the single largest shareholder in RHBCap, with a 41.49% stake, followed by Abu Dhabi’s Aabar Investments PJS (21.2%) and OSK Group’s Tan Sri Ong Leong Huat (9.97%).

RHBCap (fundamental: 1.5; valuation: 2.1) advanced four sen or 0.54% to close at RM7.47 today, with a market capitalisation of RM19.23 billion, while AMMB's (fundamental: 1.5; valuation: 3.0) share price gained seven sen or 1.25% to settle at RM5.66, bringing it to a market capitalization of RM16.85 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)