Malaysia banking sector abuzz with M&A talk (BT)

The banking sector is abuzz again on potential mergers and acquisitions (M&A), after rumours surfaced that major shareholders of Alliance Financial Group (AFG) may divest out.

In a research note today, HwangDBS Vickers Research said there is still room for M&As, but pricing remains the key.

"There is still room for Malaysian banks to consolidate and the idea of creating regional champions is still on the cards," it added.

It was reported recently that Temasek Holdings and Langkah Bahagia are keen to divest their combined 29.1 per cent stake in AFG.

The research house favours AFG for its scalable domestic franchise and non-interest income traction, which it said will boost sustainable earnings and ultimately return on equity (ROE).