No merger if there are unfavourable risks, says Nazir

There will be no merger between the bank, RHB Capital Bhd and Malaysia Building Society Bhd (MBSB) if there are any possible unfavourable risks, CIMB Group Chief Executive Datuk Seri Nazir Razak said.

"If we felt that the merger brought unfavourable risks to CIMB, there will be no merger. It is the responsibility of the management team to basically negotiate and come out with a deal that's good for all the shareholders.

"I'm sure that in this case, all the management teams, including RHB and MBSB, will be doing the same.

"All will be revealed and if there is a deal, we will obviously present the case to all our stakeholders," he told reporters at the CIMB Iftar dinner with CIMB Foundation's beneficiaries here Monday.

CIMB, RHB and MBSB have received the approval from Bank Negara Malaysia on July 10 to commence discussions to merge and create a mega Islamic bank.

Nazir said the management teams of CIMB, RHB and MBSB had been in negotiations towards producing a satisfied deal for all parties.

"We have 90 days exclusive period of discussion and hopefully we can complete the negotiation by that period and announced whether we want to proceed with the transaction or not.

"In Malaysian context, one need an approval before one can enter into detail negotiation and we are going to that process. At this early stage, that's all it can be. We need to discuss in detail with each other so we can come out with the deal that all parties want," he added.

Affin Investment Bank Research in a research note recently said the merger and acquisition between the three parties would pave the way for the formation of the largest banking group in Malaysia, with a combined asset size of RM613.7 billion, overtaking Maybank whose asset size stood at RM578 billion as of March

2014.

"The possibility of a potential merger of these three entities could be due to the need to further consolidate market share in view of the stiff competition amid a saturation point in the domestic banking environment," it said.