Size matters to Malaysian banks

Malaysia’s two largest banks are getting ready for one of the country’s biggest ever corporate battles. Malayan Banking Maybank and CIMB, number one and two respectively, were given regulatory approval late on Tuesday to bid for RHB Capital, ranked number five. Size still seems to matter to bankers.

Size is also important for Bank Negara, the central bank, which is keen for a second round of consolidation in the industry as it allows more participation by foreign lenders in its domestic market. An earlier spate of government-led bank mergers in 1998 reduced the number of lenders from 54 to 10.

Bank Negara wants national champions,...