RHB Capital and OSK Investment Bank merger creates Malaysia’s biggest stockbroker and investment bank by assets (By IFN)

RHB Capital and OSK Investment Bank merger creates Malaysia’s biggest stockbroker and investment bank by assets

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MALAYSIA: RHB Capital and OSK Investment Bank have successfully merged into a single entity and is now known as RHB Investment Bank (RHBInvest). This entity is now the country’s largest stockbroker and investment bank by assets. Speaking to Islamic Finance news, a company official noted that there are still a number of uncertainties within the new institution’s management, as OSK and RHBCap staff see their positions redefined including the absorption of Yazit Yusuff into the investment arm of RHBInvest although he was the former head of Islamic banking at OSK. No details have yet been released with regards to the finalized merger however, ongoing reports from its initial merger proposal in late 2011, have noted that the acquisition of OSK would have cost RHB Group as much as RM1.95 billion (US$642.71 million). This agreement is also expected to boost the group’s involvement in Islamic capital market deals through its Shariah compliant arm, RHB Islamic. The deal is also expected to increase the banking group’s attractiveness as an acquisition target for foreign investors; especially Middle East investors who are keen to tap into the Malaysian booming Islamic banking market. However, without a CEO to head RHB Islamic, following the retirement of Abdul Rani Lebai, its former CEO and managing director; as first reported in Vol 10 Issue 13 of Islamic Finance news, things are still up in the air with regards to the future of the new entity’s Islamic business. RHBCap, as was previously known, was initially approached by Malaysia’s two biggest banks; CIMB Group and Maybank for separate merger negotiations in mid 2011 but was called off following concerns over price.