Sumitomo Mitsui Financial Group Inc offered to buy a 25 per cent stake in RHB Capital Bhd, Malaysia's fourth-largest bank by assets, two people with knowledge of the matter said.

Carlyle Group, the Washington-based private equity firm, is also considering a bid, people familiar with the process said, declining to be identified. RHB Capital rose as much as 2.4 per cent to a 14-year high in Kuala Lumpur trading today, valuing the stake at RM5 billion (US$1.66 billion), data compiled by Bloomberg show.

Sumitomo Mitsui, Japan's second-largest bank by market value, joins Japanese companies including Takeda Pharmaceutical Co and Toshiba Corp in pursuing overseas assets after the country's strongest earthquake exacerbated an economic slump. Takeda and Toshiba yesterday announced a combined US$16 billion of overseas takeovers.

Abu Dhabi Commercial Bank PJSC is seeking to sell its 25 per cent stake in RHB. The United Arab Emirates' third-biggest bank by assets appointed Goldman Sachs Group Inc and Bank of America Corp to advise it on the sale, Chief Executive Officer Ala'a Eraiqat said last month.

Mitsui Sumitomo Insurance Co said this month it agreed to pay 7 trillion rupiah (US$820 million) for half of PT Sinar Mas Multiarta's life insurance unit in Indonesia. In April, trading company Mitsui and Co bought a 30 per cent stake in Malaysian hospital operator Integrated Healthcare Holdings for RM3.3 billion.

A spokesman for Sumitomo Mitsui in Tokyo, who declined to be identified, said he had no comment. Dorothy Lee, a Hong Kong- based spokeswoman for Carlyle, declined to comment.

Open to Merger

Hong Leong Bank Bhd this month completed the acquisition of EON Capital Bhd to create what may become Malaysia's fourth-largest lender with assets of more than RM140 billion. China Construction Bank Corp, the country's second-biggest bank, expressed interest in buying EON Capital, people with knowledge of the matter said in April.

RHB is open to a merger, its biggest shareholder, state-run pension fund Employees Provident Fund, said last month. The fund added that no transaction is currently being planned. EPF holds a 45 per cent stake in RHB Capital, according to data compiled by Bloomberg.

EON Capital this month rose to the highest level in almost four years in Kuala Lumpur trading after its board accepted Hong Leong Bank's RM5.06 billion offer. The takeover helped billionaire Quek Leng Chan's Hong Leong, Malaysia's sixth- largest bank, displace RHB Capital as the Southeast Asian nation's fourth-biggest banking group by assets.

Malaysia's economy is forecast by the government to grow as much as 6 per cent this year following a 7.2 per cent expansion last year, which was the fastest pace in a decade. The central bank raised its benchmark overnight policy rate by 0.25 percentage point to 3 per cent on May 5 to fight inflation. -- Bloomberg