KUALA LUMPUR: CIMB Group Holdings Bhd, RHB Capital Bhd and Malaysia Building Society Bhd (MBSB) announced today that they have ceased discussions on the proposed merger and creation of a mega Islamic bank in light of the current economic conditions.

"We had thoroughly deliberated the merger, and while we remain convinced that the combination of our three franchises follows sound strategic logic, we ultimately were not able to arrive at a value-creating transaction for all stakeholders," CIMB Group Acting Group Chief Executive Tengku Datuk Zafrul Tengku Abdul Aziz said in a joint statement.

"The decision to cease discussions was arrived at after a detailed review of potential synergies that could be realistically delivered, especially in the current economic environment," he said.

"We would like to put on record our sincere appreciation to the Board of Directors and management of RHB Capital and MBSB for their full cooperation during our discussions," he added.

CIMB Group and RHB Capital have withdrawn their application to Bank Negara Malaysia, and the exclusivity agreement entered into by the parties has been terminated with the cessation of talks.

"We undertook discussions for the proposed merger on the premise that we would be able to arrive at a value-enhancing proposal for our stakeholders and bring it to our respective shareholders," RHB Capital Group Managing Director Kellee Kam said.

"Protecting and creating stakeholder value is paramount to all parties and given the changes in the environment, we could not conclude a case to proceed further.

"Nonetheless, we would like to thank all the parties involved in the discussions for the time and effort spent. We wish CIMB and MBSB well in all their future endeavours," he said.

Meanwhile, MBSB President and Chief Executive Officer Datuk Ahmad Zaini Othman said: "The opportunity to be a part of a mega Islamic bank was an exciting one for us.

"Given that the discussions have ceased, we can now continue to focus on the strength of our franchise and achieving the goals that we have originally set for ourselves. We thank everyone involved for their hard work," he said. - BERNAMA