Bankers have likened to the beginnings of a “nanny state” in the banking sector and say the bank should remain as regulators.
“I’m not going to comment on individual banks,” she told The Malaysian Insider today when asked her response to mounting criticism to the move.
The Malaysian Insider had earlier reported puzzling requirements by the central bank, including for Abu Dhabi Commercial Bank (ADCB) and new RHB shareholder Abu Dhabi investment fund Aabar Investments to adjust the sale price if the merger price is lower than the RM10.80 per share price agreed by both companies and the merger must not deviate too far from the market price so as to weaken the merged entity.
The Malaysian Insider understands that after the deal was signed on Friday, Bank Negara sent a series of harsh emails to ADCB telling them to state the conditions imposed by the central bank in their press releases, which some bankers say is an aggressive and unusual intervention for such a matter.
The country’s two biggest banks — CIMB Group Holdings Bhd and Malayan Banking Bhd (Maybank) — have won separate Bank Negara approval to begin competing merger talks with Malaysia’s fourth biggest lender RHB Capital, triggering a takeover battle that may create Southeast Asia’s biggest bank. CIMB, led by by Datuk Seri Nazir Razak, is the front-runner for the deal.
“This should be a free market transaction. Why the need for the strange conditions,” a banker told The Malaysian Insider on condition of anonymity.
“Bank Negara should also allow the new shareholders to decide if they want to support a merger or not. We don’t need a nanny state in banking,” he added.
Analysts have said the RHB Capital takeover could be based on a price to book value of 2 to 2.5 times which will work out to between RM9.70 and RM12 per share. Based on RHB’s share base of 2.2 billion shares, any investor buying EPF’s entire stake would have to pay up to RM26.3 billion.
