The report said the misappropriation was allegedly the work of ex-employees of Alliance Bank who had moved over to AmBank in the past one year.

However, after filing the suit, Alliance Bank issued a statement that seemed to suggest a “softening approach”, The Edge Financial Daily reported today, quoting a source.

It said the action could be a bid to reduce collateral damage.

It is rare for banks in Malaysia to sue each other.

The statement said: “With reference to the recent article in The Edge Malaysia (weekly), this issue arose from the actions of certain individuals. We have reached out to AmBank to resolve this matter.”

According to The Edge publications, at the centre of the issue is AmBank managing director of business banking Christopher Yap, who was hired by the bank to lead the new division.

The Edge Malaysia weekly reported that Alliance Bank had identified an electronic paper trail that showed sensitive information making its way into Yap’s hands after his departure.

It said Yap has reportedly been placed on administrative leave.

In a written reply that was carried in The Edge Malaysia weekly last week, AmBank said: “AmBank will not be engaging in speculation in relation to the particular pending legal proceedings.”

The Edge Financial Daily said that at this stage, it was still possible that both banks would be able to settle the suit relatively amicably, and more importantly, beyond the public eye.

“This may be desirable, since sources tell The Edge Financial Daily that AmBank may have legal grounds to escalate the matter and widen the scope of the legal battle.”

The suit is expected to be heard in the coming weeks.