RHB Capital targets taking over CIMB

Should the deal take place, it would generate a combined market value of $28.5bn.

Malaysian lender RHB Capital, which was a takeover target of its bigger rivals until last week, is now aiming to take over the country's second largest bank CIMB Group, Singapore's Straits Times reported on Friday.

Citing government and banking sources, the newspaper said the deal was still a work in progress.

It said if the deal was successful, the joint entity would have a market value of around 86 billion ringgit ($28.5 billion), slightly bigger than the about $27 billion of Singapore's DBS Group , Southeast Asia's largest lender.

CIMB and RHB were not immediately available for comment.

According to Thomson Reuters data, Malaysian state fund Khazanah holds 28.6 percent of CIMB while the state provident fund EPF holds 11.6 percent.

The merger plan could revive hope for the consolidation of the banking sector in Malaysia where a previous round of mergers in 1998 reduced the number of lenders to 10 from 54.

View the full story in Reuters.