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Do bank mergers within the same market work?

Most in-market deals are predicated on reducing costs, a tough task given the challenges of retaining key personnel, staff severance, systems integration and political implications.

The muted share price reaction to the CIMB/RHB/MBSB merger announcement and subsequent rise in prices to the news that the deal was off suggest that the market viewed the risks to be far greater than the benefits.

BANKING mergers and acquisitions generate a lot of excitement with the usual announcements extolling the virtues of the proposed combination. The three-way merger in Malaysia between CIMB, RHB and MBSB, which collapsed recently, is no exception. Combining two banks is difficult enough. This...

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