3 Malaysian banks axe plans to merge to create Southeast Asia's fourth-largest lender

Three Malaysian lenders say a proposed merger to create Southeast Asia's fourth-biggest commercial bank has collapsed after they failed to agree on terms.

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 the region's largest, as well as a mega Islamic bank.

The three lenders said Wednesday they had ceased discussions as the proposed deal cannot create value for them amid current economic conditions.

The 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.