CIMB, Maybank to Start Rival Merger Talks With RHB Capital

May 31, 2011, 7:19 AM EDT By Chan Tien Hin and Elffie Chew

(Updates with relative value of respective possible mergers in second paragraph.)

May 31 (Bloomberg) -- CIMB Group Holdings Bhd. and Malayan Banking Bhd. have won separate Malaysian central bank approval to begin competing merger negotiations with RHB Capital Bhd. that may create Southeast Asia’s biggest bank by market value.

The combined capitalization of CIMB and RHB would be $27.3 billion, based on today’s closing prices. Maybank could boost its market worth to $28.8 billion, which would exceed the $27.7 billion value for Singapore’s DBS Group Holdings Ltd., the region’s biggest lender.

The two biggest Malaysian banks are seeking the merger to expand amid rising competition following the central bank’s decision to grant more licenses to international players including Bank of China Ltd. Hong Leong Bank Bhd. this month bought EON Capital Bhd., while ECM Libra Financial Group Bhd. is said to have appointed an adviser to find a buyer.

“RHB will consider all proposals that are beneficial to shareholders,” Azlan Zainol, RHB’s chairman said in an interview today. “As far as I am concerned, I have not being officially notified on the proposals.”

--With assistance from Chong Pooi Koon in Kuala Lumpur. Editors: Barry Porter, Linus Chua.

To contact the reporter on this story: Chan Tien Hin in Kuala Lumpur at thchan@bloomberg.net; Elffie Chew in Kuala Lumpur at echew16@bloomberg.net;

To contact the editors responsible for this story: Barry Porter at bporter10@bloomberg.net; Chitra Somayaji in Hong Kong at csomayaji@bloomberg.net.

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