AFG may be looking to merge with HLB

Win-win situation: AFG’s headquarters in Kuala Lumpur. In terms of structural similarities, both AFG and HLB have a fairly strong liquidity franchise and cost discipline, with HLB having a slightly stronger asset quality edge.

PETALING JAYA: With scale being an increasingly important factor in the local banking industry, talk has now emerged that Alliance Financial Group Bhd (AFG) could be looking to merge with Hong Leong Bank Bhd (HLB).

The twist, though, is that AFG, which is the smallest financial institution in Malaysia in terms of asset size, could be the acquirer in the potential merger and acquisition (M&A) exercise, instead of being the target company to be acquired, according to UOBKayHian Research.