Affin starts negotiation for Bank Muamalat merger

Malaysia's central bank has given the green light for Affin to commence negotiations for a possible acquisition of equity interests in Bank Muamalat.

Negotiations must be completed on or before Dec 31.

The potential disposal of interest in Bank Muamalat is in line with Bank Negara’s requirement – that following the completion of the acquisition of 70% equity interest in Bank Muamalat by DRB-Hicom on Oct 22, 2008;

DRB-Hicom is required to reduce its equity interest in Bank Muamalat to 40%, DRB said in a separate statement.

“Affin Holdings and the DRB would be required to obtain the prior approval of the Finance Ministry – with Bank Negara’s recommendation, pursuant to the Islamic Banking Act 1983 – before entering into any agreement toeffect the above disposal,” it added.

Should these negotiations eventually lead to a merger and/or acquisition it will create a larger bank that will be able to more effectively compete against the bigger banking boys in a more or less saturated market locally today.

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