“Mergers are driven by market forces. I imagine there is still some room for consolidation,” he said.

Azman said smaller-sized banks have to ask themselves on where they want to be (in the future).

“Do they want to remain the same size? When you are a smaller bank, it is said being small means being nimble. But, there is also a case for size, too.”

AmBank Group and RHB Bank, the country’s fourth largest lender had on June 1, 2017, jointly announced that they had received approval from Bank Negara Malaysia to commence merger discussions.

Azman said the proposed merger between AmBank Group and RHB Bank is a “win-win deal”.

He said it was advantageous for the two lenders as it will then make the entity to be the fourth largest in the country, behind Public Bank Bhd, CIMB Group Holdings Bhd and Malayan Banking Bhd.

“Still, we don’t know what the shape of the merged entities will be, and it is too early to comment on anything at this stage,” he added.

Azman said the banking sector outlook remains bright as it has been progressive the past quarter.

“We are looking at sustaining and hopefully be better than last year,” he told reporters after presenting scholarships to 10 undergraduate students from the International Islamic University here today.