Do you support the possible RHB-CIMB/Maybank merger?

  • Yes (15%, 6 Votes)
  • No (73%, 30 Votes)
  • Undecided (12%, 5 Votes)

Total Voters: 41

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Background: Rivals CIMB and Maybank are racing against each other to merge (takeover?) with RHB. It is a high-stake game. The winner will have a significantly increased regional profile.

At the same time, a current shareholder of RHB, Abu Dhabi Commercial Bank (ADCB) is selling its stake to its sister’s company Aabar Investments. Both the ADCB and Aabar Investments are owned by the government of Abu Dhabi.

Something fishy is going on with that sale, especially when such transaction is being done knowing that CIMB and Maybank are in competition to merge with RHB. Maybe the government Abu Dhabi is artificially pushing the value of RHB up. It is bad sport but they cannot really be blamed for that.

Reacting to that, the Bank Negara has told RHB that the transaction price between ADCB and Aabar should not affect the prices to be offered by CIMB and Maybank. A truly “what the hell” moment from the Bank Negara. If the transaction between ADCB and Aabar is fishy, the Bank Negara’s involvement is a complete dung.

Initially, I was neutral with the merger, despite knowing that a successful transaction between RHB and CIMB or Maybank would create a giant government-linked company.

With the Bank Negara’s latest position, I am moving towards the opposition camp. I am waiting for somebody to have the balls to flick to the bird to CIMB, Maybank, Khazanah Nasional, Permodalan Nasional Berhad, the Bank Negara and the government of Malaysia.

Oh, you should really try to form your own opinion before voting.  Sorry for about trying to affect your opinion. Naughty me (but hey, this is a libertarian blog. The default opinion is likely to be obvious).

5 Responses to “[2383] Do you support the merger?”

  1. on 20 Jun 2011 at 15:36 Bobby

    I did the due diligence when Sime took over what was left of UMBC post 97′ crisis.
    RHB became a “scapegoat” to take over after this comedy of errors wiped out RM1.5b of Sime’s retained earnings.
    I’ve voted no, not because I was swayed by your arguments, but because I truly believe that the market should determine who shall exist in our financial services industry.

  2. on 20 Jun 2011 at 18:39 Iskandarbak

    I didnt hear RHB begging to be bought over. I didnt hear EPF saying it is not good business for them to be holding such high stakes in a bank. Heck, in fact it is good business for EPF to run a world class bank on their own but with more conservative risk profiles. RHB has better means to capital resources then CIMB and Maybank on their own (at arms length of course).

    So, it is obvious that this suggested merger is not a market driven exercise. It is somebody engineering it.

    RHB can be a niche player and market always has a place for niche players. Like all banks, RHB too must upgrade their human capital for better delivery.

    What does CIMB and Maybank gain by this merger exercise. Since when did size matter? Just because you have big one doesnt mean you are good at using it. In fact, RHB can use their nimble position for better results.

    Tan Sri Azlan Zainol, for whom, I had worked (distance)under eons ago, thrives on challenges. This merger, in my view, is not his idea.

  3. on 22 Jun 2011 at 12:34 jonathan

    merger is good if it create value. look at sime-guthrie-golden hope merger. it did not have any impact or add on any additional value post merger.

    the idea of a giant bank to be bigger than our neighbouring (singapore) banks is something we have always wanted to do. we must be honest & asked ourselves whether it is good for the shareholders (EPF) and the public.

    look at lehman bros. the bank everybody is saying too big to fail. what happen? let the market decide whether the merger is value enhancing ( between CIMB or Maybank with RHB )

    If a government controls a giant bank and if that particular giant bank fail. the impact will be tsunami

  4. on 24 Jun 2011 at 16:19 joint holder

    imagine the shitstorm if a chinese bank was in the shoes of the abu dhabi companies. perkasa would be all “oi! jangan kacau bisnes melayu ah!”

  5. on 24 Jun 2011 at 18:11 Hafiz Noor Shams

    joint holder, if it was a malay in that shoe, I suspect someone (hint, hint) would call it corruption.

    But it’s a fishy transaction (In retrospect, maybe Abu Dhabi wanted to discourage sale). Does race matter?

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