(Bloomberg) -- RHB Bank Bhd., Malaysia's fourth-largest lender by assets, and AMMB Holdings Bhd. are planning to pursue talks to merge, people with knowledge of the matter said.
The two Malaysian lenders have submitted an application for central bank approval to start formal negotiations, the people said, asking not to be identified because the information is private. Shares of AMMB have risen 21 percent in Kuala Lumpur trading this year, giving it a market value of 15.7 billion ringgit ($3.7 billion), while RHB is worth 21.6 billion ringgit based on Wednesday's close.
A combination would help RHB better compete with larger rivals Malayan Banking Bhd. and CIMB Group Holdings Bhd. Any deal would add to the $15.9 billion of acquisitions targeting Southeast Asian banks over the past three years, data compiled by Bloomberg show.
Malaysia's central bank has been encouraging consolidation among local lenders to help create larger entities that can better compete in the region. RHB and AMMB both requested trading in their shares be suspended effective Thursday morning, pending material announcements.
Representatives for AMMB and the Malaysian central bank declined to comment, while a spokeswoman for RHB didn't immediately respond to an email and call to her mobile phone seeking comment outside regular business hours.
--With assistance from Joyce Koh
To contact the reporters on this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net, Chanyaporn Chanjaroen in Singapore at cchanjaroen@bloomberg.net.
To contact the editors responsible for this story: Ben Scent at bscent@bloomberg.net, Marcus Wright at mwright115@bloomberg.net, Shamim Adam, Timothy Sifert
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