The proposed merger between Saudi-based Al Rajhi Bank’s Malaysian unit and MIDF is left hanging in the balance after the duo’s shareholders missed a 27 June deadline to come up with a deal.
Bank Negara had originally given Malaysian Industrial Development Finance (MIDF) and Al Rajhi Malaysia a period of three months to hold discussions for their proposed merger.
According to a local daily, the lenders’ respective owners— Saudi’s Al Rajhi Bank and Permodalan Nasional Bhd (PNB)—requested for more time to negotiate the merger from Malaysia’s central bank.
It remains unclear if the central bank will grant their request as it had already extended the deadline once before.
The merger is seen as a positive development for the Islamic banking industry. Al Rajhi Malaysia has commercial and retail banking as well as wealth management operations, while MIDF has investment banking and research operations.
JP Morgan is advising PNB while Al Rajhi Malaysia is being advised by Hong Leong Investment Bank in Singapore on the proposed merger.
Source Zawya