CIMB and Maybank in talks to buy RHB

From Reuters, Malaysia's top two banks, Maybank and CIMB Group, are beginning rival talks to buy RHB Capital, which could lead to creating Southeast Asia's largest banking group.

Analysts said Maybank and CIMB's move on RHB, which has a market value of about $6.7 billion, marks the start of a "race for banking consolidation" in Malaysia, where stiff competition continues to shrink net interest margins -- or what a bank makes on loans and pays out on deposits.

"To both of them, RHB capital is the way forward," said Danny Wong, a fund manager with Acera Capital that owns shares in all three banks.

"For CIMB, taking over RHB would be a good way to strengthen its commercial banking side. It wants more momentum in that area since it's strong the investment side.

"In the case of Maybank, if the acquisition involves taking over RHB's brokerage arm and securities, it will boost its investment banking side."

A takeover of RHB by Maybank would make the biggest banking group in Southeast Asia by market value, exceeding Singapore's DBS. A CIMB-RHB combination would rank just below DBS.

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