EPF open to merger proposals for RHBCap

Malaysia’s Employees Provident Fund (EPF), a major shareholder of RHB Capital Bhd, said it is open to merger proposals for the bank if it adds value to shareholders.

The country’s largest pension fund added however, it is currently not in talks with any parties.

“Of course we are open to mergers so long as it brings good value for our shareholders...But right now, there is no opportunity for a merger,” said Tan Sri Azlan Zainol, the chief executive officer of EPF.

The pension fund owns a 45 per cent stake in RHB, Malaysia’s fourth-largest bank by assets.

Asked to confirm market talk that the EPF has been approached to consider a merger between RHB and AMMB Holdings Bhd , the country’s fifth-largest bank by assets, Azlan said: “No, that’s not true.”

Malaysia’s banking industry has lately been rife with talk of mergers and acquisitions.

Australia and New Zealand Banking Group , Australia’s fourth-largest bank with a 24 per cent stake in AMMB, wants a bigger stake and Malaysia’s Prime Minister Datuk Seri Najib Razak has said he would consider the request provided the central bank approved.

Bankers and analysts are generally positive about an RHB-AMMB merger.

A merged RHB-AMMB would overtake Public Bank as the country’s third-largest banking group by assets, with assets of RM234 million compared to Public Bank’s RM226 million based on end-2010 data, Citi said in a recent research note.

Malaysia has nine local banks, led by Malayan Banking Bhd and CIMB , but some bankers and analysts have suggested that the banking industry may be reaching its limit.

With competition heating up, consolidation may be one way for smaller banks to keep up.

Asked what the EPF thought about Abu Dhabi Commercial Bank’s (ADCB) plan to sell its 25 per cent stake in RHB, Azlan, who is also the chairman of RHB Bank, said: “They have not confirmed it in writing to us.”

ADCB, which is considering selling its 25 per cent stake in RHB, has hired Goldman Sachs and BOA-Merrill Lynch as advisors, although it has yet to make a firm decision on the sale, its chief executive said on Tuesday in Abu Dhabi. - Reuters