25 Malaysian banks complete merger talks

The Malaysian bank merger process nears completion, as banks take advantage of a tax break.

Of the total 31 sales and purchase agreements signed by Malaysian financial institutions for their merger exercise, 25 have completed their negotiations, said Bank Negara Malaysia governor Dr Zeti Akhtar Aziz.

However, the remaining six have yet to find their merger partners, she told a press conference in Kuala Lumpur on Wednesday to announce the country's second quarter gross domestic product (GDP).

Dr Zeti said BNM was monitoring the progress closely.

The merger exercise, which will see 10 anchor groups, is part of the financial system masterplan finalised by BNM to change the country's banking landscape.

The 10 anchor banks are Malayan Banking Bhd, Bumiputra-Commerce Bank Bhd, RHB Bank, Public Bank, Arab-Malaysian Bank, Hong Leong Bank Bhd, Perwira Affin Bank Bhd, Multi-Purpose Bank Bhd, Southern Bank Bhd and EON Bank Bhd.

BNM has said that all merger proposals should be fully completed and implemented by Dec 31, 2000.

Dr Zeti also said that the August 31 deadline for tax exemption incentives granted to merging domestic banking institutions is still intact. The incentives comprised exemption from stamp duty, real property gains tax as well as tax credit on 50 percent of the accumulated losses of banking institutions to be acquired.

The tax incentive is only eligible to banking institutions which had signed sale and purchase agreements on or before August 31 this year.


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