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Posted: 30 Jun 2011 06:19 PM PDT

Malaysia's central bank Governor Zeti Akhtar Aziz said consolidation among banks would be good for the country and help integrate the its financial system with other emerging economies.

"We do envisage there will be future consolidations," Zeti said in an interview in London today. "If two or three large banks merge in our financial system, I think it is good for Malaysia as we venture into our next phase of development in our financial system where we become more integrated with the rest of the world."

Her comments come days after CIMB Group Holdings Bhd and Malayan Banking Bhd, Malaysia's two biggest banks, scrapped rival talks to acquire RHB Capital Bhd, ending ambitions to create Southeast Asia's biggest lender.

Local banks are seeking expansion amid intensifying competition as the central bank grants more licences to international lenders including Bank of China Ltd.

"There will be more financial centres in emerging economies that will be highly connected with each other and this is important because it will lead to the better intermediation of funds across borders," she said. "If we are going to participate in that, we do need to have a few larger banks."

Zeti said in April that the central bank will let market forces decide how many local lenders remain in the country should there be consolidation. Asked today if RHB should seek a new partner, she said the issue is "entirely up to RHB."

Speaking on the sidelines of a conference hosted by the Official Monetary and Financial Institutions Forum and Lafferty Group, Zeti said the terms and conditions of any consolidation will be driven entirely by the private sector, though the central bank will set the parameters, one of which is that any transaction shouldn't "weaken the institution." The financial industry should support the real economy, not the other way round, she said.

Zeti also said the central bank has "other priorities" than consolidation on its agenda. -- Bloomberg

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CIMB: We cease merger talks with RHBCap

Posted: 30 Jun 2011 06:15 PM PDT

CIMB Group Holdings Bhd, Malaysia's second-biggest banking group, isn't in talks for a merger with RHB Capital Bhd, Effendy Shahul Hamid, head of group marketing and communications at CIMB, said by phone today.

"I can reaffirm that we have ceased negotiations on RHB and there is no change in that position," he said.

He was responding to a Straits Times report that said RHB is planning to acquire CIMB in a deal that would create Southeast Asia's biggest lender. -- Bloomberg

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Khamis, 30 Jun 2011

NST Online Business Times : latest

NST Online Business Times : latest

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