Three Malaysian lenders said yesterday that a proposed merger that would have created the country's biggest bank has collapsed after they failed to agree on terms amid a deteriorating economic outlook. The country's No. 2 bank, CIMB Group Holdings Berhad, along with fourth largest lender RHB Capital Berhad and Malaysia Building Society Berhad last year announced plans to combine their businesses via a share swap. It would have created Malaysia's top bank and one of Southeast Asia's largest, as well as a mega Islamic bank. Share prices of all three lenders have slid since the deal was announced in October while the plummeting oil price is hurting Malaysia's economy. A weakening economic outlook also dampens loan growth and bleakens prospects for the banking industry. The three lenders said in a joint statement they had ceased discussions as the proposed deal cannot create value for them amid current economic conditions.
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