AMMB and RHBBank have both requested for a suspension of their shares pending which could potentially relate to a merger of both banking groups. Given RHBBank’s larger scale and ANZ Banking Group’s intention to exit AMMB, we would not be surprised if RHBBank leads the merger. As the revenue synergies between the two banking group is not compelling, we expect the market to react negatively to the acquirer assuming it is unable to reap the full cost rationalisation benefits. Sentiment on AMMB would depend on whether there is a cash option for shareholders to exit. Maintain our SELL on RHBBank and HOLD on AMMB pending further details.

Source: UOB Kay Hian Research - 1 Jun 2017