Now that the Malaysian central bank has given its blessing for RHB Bank and AMMB Holdings to merge, analysts are forecasting what the new entity could bring.
Research from Alliance Investment Bank claims that if the deal goes through, the merged institution would become Malaysia's fourth largest bank, and ASEAN's ninth largest with an estimated 386 billion Malaysian Ringgit in assets.
The RHB Bank (RHB) and AMMB Holdings (AmBank) merger would also allow the enlarged entity to claim the number one spot for asset management, general insurance and equity broking, and the number two spot for Islamic banking in Malaysia, according to the research.
Job Losses
The proposed merger will offer potential revenue synergies in terms of strengthening the commercial banking and investment banking business. However, there will be large areas of duplication in terms of resources and customers, as neither bank is a market leader.
The doubling up of operational and branch network resources could also lead to job cuts.
All Share Deal Not Ideal For ANZ
The transaction would be an all-share deal, and the two banks would have until Aug 30 to negotiate a deal, to be automatically renewed if necessary.
AmBank's major owner is Australia and New Zealand Banking Group (ANZ) with a 23.7 percent stake, while its second-largest shareholder is founder Tan Sri Azman Hashim, who has an effective stake of 12.97 percent.
AmBank was entangled in the alleged disappearance of billions of dollars from Malaysia's state investment fund 1MDB, another reason ANZ is known to be keen to dispose of the holding.
