Malaysia's MBSB renews merger attempt, eyes tie-up with Asian Finance Bank

KUALA LUMPUR, Dec 21 (Reuters) - Malaysia Building Society Bhd (MBSB) will begin merger talks with Asian Finance Bank Bhd (AFB) in its third attempt in about two years to convert into a full-fledged Islamic lender.

The non-banking lender said in a bourse filing on Wednesday that it had received a letter from Bank Negara Malaysia in which the central bank said it had "no objection in principle for MBSB to commence negotiations with the existing shareholders of AFB".

The central bank requires that the negotiations be completed within six months, MBSB said.

AFB is co-owned by Qatar Islamic Bank, RUSB Investment Bank Inc, Tadhamon International Islamic Bank and Financial Assets Bahrain WLL.

MBSB had previously entered into talks with Bank Muamalat Bhd for a merger that would have created the largest standalone Islamic bank in Malaysia, but the talks fell through in February this year.

In January 2015, talks of a three-way tie-up between MBSB, CIMB and RHB to create Malaysia's biggest bank by assets collapsed. (Reporting by Liz Lee; Editing by Himani Sarkar)