Malaysian lenders AmBank Group and RHB Banking Group have secured approval from the country’s central bank to begin negotiations for a proposed merger.

The merger will be an all shares deal, the banks stated in a stock exchange filing. The banks have a deadline of 30 August 2017 to exclusively negotiate terms of the merger.

The two banks have more than MYR368bn ($86.26bn) in combined assets. The deal, if materialised, would lead to the creation of the country’s fourth largest banking group.

AmBank Group CEO Sulaiman Mohd Tahir said: “I am positive that the proposed merger with RHB Banking Group will create a stronger business and financial presence.

“Our combined strength in key business segments particularly in retail and investment banking will bode well for us as we move forward to achieve our goal of becoming a formidable banking group.”

RHB group managing director Dato’ Khairussaleh Ramli added: “We are confident that if the proposed merger takes place, it will create greater synergy for the enlarged banking group, benefiting our shareholders, customers, employees and all other stakeholders.”

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