Asian Finance Bank Berhad (AFB) and Malaysia Building Society Berhad (KLSE:MBSB) possibly heading towards the merger. Expectations are running high that shareholders of Asian Finance Bank will agree to a sale to Malaysia Building Society (MBSB) ahead of a looming June 21, 2017 deadline. The proposed plan involves MBSB buying AFB's assets and liabilities in a deal that values the latter at a price-to-book value (PBV) of between 1.2 and 1.5 times, one of the sources says.

At this point, just two of AFB's four Middle East shareholders — Qatar Islamic Bank (Q.P.S.C.) (DSM:QIBK) and Global MENA Financial Assets Limited (6.67%) — have indicated they want to exit; the other two — RUSD Investment Bank Inc. (16.67%) and Tadhamon International Islamic Bank (10%) — want shares in the enlarged banking entity, the source says. As such, it is expected to be a deal that involves both cash and shares, with shares going to the shareholders that want to stay. "Now, it's just a matter of waiting for confirmation from AFB on pricing.

That's the only piece of information that's needed before the parties can make their submissions to Bank Negara Malaysia. They expect to do it before the deadline," the source tells The Edge.