RHB, which employs some 4,400 people in its investment banking division across southeast Asia, Hong Kong and China, is worried about potential job losses due to overlapping businesses at the other two banks, the sources added. It was not clear whether RHB will formally present the proposal to CIMB and MBSB during the merger negotiations.
KUALA LUMPUR: RHB Capital Bhd, Malaysia's fourth-largest lender by assets, is discussing the sale of its investment banking unit if a planned merger with two rivals proceeds, people familiar with the plan said on Thursday.
CIMB Group
Holdings Bhd, the nation's second-biggest bank, said in July it was seeking a merger with RHB and Malaysia Building Society Bhd to create Malaysia's biggest Islamic bank and the nation's biggest lender, surpassing Malayan Banking Bhd (Maybank).
RHB, which employs some 4,400 people in its investment banking division across southeast Asia, Hong Kong and China, is worried about potential job losses due to overlapping businesses at the other two banks, the sources added.
The sources declined to be identified as the discussions are confidential.
It was not clear whether RHB will formally present the proposal to CIMB and MBSB during the merger negotiations.
A CIMB spokeswoman did not offer an immediate comment.
An RHB official said: "Discussions on the proposed merger are currently ongoing. We are not in a position to make any comments at this juncture."
CIMB has already submitted a merger proposal to RHB and MBSB which involves a share swap deal and values the two lenders just above their current market capitalisation, one of the sources said.
RHB Investment Bank, which offers services ranging from corporate finance to securities trading, is worth more than 2 billion Malaysian ringgit ($636 million), according to two Kuala Lumpur-based analysts covering RHB.
"They are looking to sell it (RHB Investment Bank) to banks from China," one of the people said. "It is very appealing for banks that want to have an exposure to southeast Asia, and the Chinese are especially interested in that," the person added.
RHB was ranked third in Malaysia in 2013 league table for equity capital market deals, with a 7 percent market share and No. 4 in mergers and acquisitions, having a market share of 10.5 percent, according to Thomson Reuters data.
"CIMB doesn't really need them (RHB Investment Bank)," one of the sources said. "It is about the people when it comes to investment banking and CIMB already had the best of them. What's more, the licenses too."
RHB in 2012 bought OSK Holdings Bhd's investment bank for 1.95 billion ringgit, creating the country's largest investment bank by assets and overtaking CIMB as the biggest brokerage with a market share of 15 percent.
In the same year, CIMB paid $140 million for some Asian units of Royal Bank of Scotland Plc (RBS), expanding its Asian footprint. - Reuters
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