Merger talks with MBSB going on smoothly, says Bank Muamalat Chairman

The merger negotiations between Bank Muamalat and Malaysia Building Society Bhd (MBSB) is going on very well and smoothly, says Bank Muamalat Chairman Tan Sri Dr Munir Majid.

He said there was no conclusion yet but the progress, thus far, was good.

"We will still have to report to Bank Negara on what we have achieved by year-end, after which we will proceed to the next stage," he said at a 'Charity Free Market - Back to School' programme, organised by the bank.

Bank Negara Malaysia gave its approval to Bank Muamalat and MBSB to begin merger talks on Sept 30, a move that could pave the way for the creation of the countrys biggest standalone Islamic bank.

The central bank required the merger negotiations to be finalised within three months from the date of the approval.

It was reported earlier that assuming the merger talks go through, the combined asset size of the two lenders is estimated to be over RM60 billion, higher than the RM54 billion asset size of BIMB Holdings Bhd, the holding company of Bank Islam Malaysia Bhd, Malaysias largest full-fledged Islamic bank.

Munir said while asset size is important, its quality also was a critical factor to look into.

"Asset size without asset quality will lead to a big problem. So we have to look at it," he said.

DRB-Hicom Bhd holds a 70 per cent stake in Bank Muamalat while Khazanah Nasional Bhd, the remaining 30 per cent.