State Intervention, Globalization and the Evolution of Malaysian Banks' Identities

This article describes and explains the evolution of Malaysia's locally owned banks in a series of mergers and acquisitions within national borders and beyond. It argues that state intervention, external economic and financial crises and the liberalization of the financial sector have compelled the consolidation of local banks in Malaysia. The consolidation process has resulted in the increased size of state-owned banks, decreased the number of local Chinese-owned banks and seen a decline in family shareholding in the remaining Chinese-controlled banks. Through regional expansion both Chinese-controlled and stateowned operations have become large-scale regionally based banking groups or global banks, deepening the financial integration in ASEAN countries.