KUALA LUMPUR (Jan 31): RHB Investment Bank, the investment banking arm of RHB Bank Bhd, has proposed a reorganisation to streamline its equity and economic research operations, and to close RHB Research Institute Sdn Bhd to rationalise costs. 

Under the proposal, RHB Investment Bank will move its equity and economic research operations which is currently housed under RHB Research Institute Sdn Bhd (RHBRI), into a division within the investment bank, while the fixed income and currencies research function will be absorbed by RHB Bank.

"The proposed reorganisation is intended to streamline the research operations under RHB Investment Bank and RHB Bank, and rationalise the costs of maintaining a separate licensed entity for research," according to an RHB Bank stock exchange filing today. 

On completion of the reorganisation, RHBRI will surrender its Capital Market Services Licence (CMSL) and be wound up. RHBRI is currently a wholly-owned subsidiary of RHB Investment Bank.

“The proposed reorganisation will be effected via an Asset Purchase Agreement (APA) to be entered into between RHB Investment Bank and RHBRI and will include a novation of contracts entered into by RHBRI and a transfer of employees. Similarly, RHB Bank and RHBRI propose to enter into an APA in relation to the transfer of assets,” it added.  

The proposed reorganisation is subject to the approval of Securities Commission Malaysia (SC) and conditional upon the successful application for a variation in RHB Investment Bank’s CMSL to include the regulated activity of investment advice.

RHB Bank said the proposed reorganisation will not have any effect on the issued capital and substantial shareholders’ shareholdings of RHB Bank, and it is not expected to have any material effect on the earnings and net assets of RHB Bank and its subsidiaries for the financial year ending Dec 31, 2019. 

The proposed reorganisation is expected to be completed by the first quarter of 2019, it added.

Shares of RHB Bank fell 4 sen or 0.73% to RM5.43 today, giving it a market capitalisation of RM21.78 billion. The counter saw some 4.85 million shares exchanging hands.