Friday 29 Mar 2024
By
main news image

KUALA LUMPUR: The structure of the proposed three-way mega merger of CIMB Group Holdings Bhd, RHB Capital Bhd (RHBCap) and Malaysia Building Society Bhd (MBSB) has yet to be finalised, said acting group chief executive officer (CEO) Tengku Datuk Zafrul Tengku Abdul Aziz.

“It’s still the same. Everything is still on the table,” he told reporters yesterday after announcing a tie-up with Tesco Stores (M) Sdn Bhd to utilise the bank’s “Plug n Pay” service.

Zafrul noted that a decision on the merger would be made before or on Oct 8.

On July 10, CIMB, RHBCap and MBSB announced that they had received the go-ahead from Bank Negara Malaysia to start discussions with the aim of merging RHBCap and CIMB. The merger will also see the setting up of an enlarged Islamic banking franchise with MBSB.

The three banks have until next week, based on a 90-day exclusivity agreement among them, to negotiate and finalise the pricing, structure and other relevant terms and conditions of the proposed merger.

Yesterday, The Edge Financial Daily reported that the CIMB-RHB-MBSB merger had escalated into a government-to-government (G-G) matter between the Malaysian government and the United Arab Emirates (UAE) government.

The report, quoting sources, said Sheikh Mansour Zayed Al Nahyan, who is UAE deputy prime minister and minister of presidency affairs, had formally reached out to Prime Minister Datuk Seri Najib Razak via a letter, expressing his government’s concern about the Employees Provident Fund’s (EPF) right to vote in the proposed mega merger.

“For us at the bank level, that is not something that we’d like to engage on. We are not privy to the discussions at that G-G level,” he said.

Nevertheless, Zafrul confirmed that there has yet to be any decision by Bursa Malaysia on the EPF’s right to vote in the proposed merger.

Certain Bursa listing rules prevent EPF from voting as it is a substantial shareholder of all three banks. EPF is the single largest shareholder of RHBCap and MBSB, with a 41.5% and 64.6% stake respectively. It also holds a 14.6% stake in the CIMB Group.

RHBCap and MBSB had, at EPF’s behest, written to Bursa to request a waiver for EPF from the listing rules.

Zafrul also clarified that CIMB’s priority now is not so much on getting the “No 1 or No 2” spot in the country’s Islamic banking market, but “to make sure the merger is viable for all our stakeholders”.

It was reported that if only the assets of CIMB Islamic Bank and RHB Islamic Bank are combined with MBSB’s operations, the new Islamic entity that emerges would have total assets of RM122 billion. As at March 31, 2014, Maybank Islamic Bhd’s total assets were RM126.5 billion.


This article first appeared in The Edge Financial Daily, on October 1, 2014.

 

      Print
      Text Size
      Share