KUALA LUMPUR (Dow Jones)--Malaysia's Hong Leong Bank Bhd. (5819.KU) is looking at a "combination of investment opportunities", a company official said Monday, but declined to comment on the possibility of a merger with Affin Holdings Bhd. (5185.KU) unit Affin Bank.

"We remain opportunistic, particularly in the region, but we do not comment on market rumors," a senior executive at Malaysia's sixth-largest lender by assets, who declined to be named, told Dow Jones Newswires.

Affin Holdings said in a stock exchange filing that it is not involved in any discussions.

"At this juncture, the board of Affin Holdings is not involved in any negotiations on any potential acquisition or merger relating to the banking operations of the group," it said.

A report in business weekly The Edge at the weekend quoted unnamed sources as saying that a merger between the two banks could be a possibility, after speculation that Hong Kong's Guoco Group Ltd. (0053.HK) may buy a controlling stake in Bank of East Asia Ltd. (0023.HK).

Malaysian tycoon Quek Leng Chan controls both Guoco and Hong Leong, while Bank of East Asia has a 20.5% stake in Affin, Malaysia's smallest bank by assets. Guoco last week emerged as BEA's second largest shareholder after raising its stake to 8.01% from 7.99%.

Hong Leong Bank, which is on a regional expansion drive, this month ventured into the consumer lending business in China with a joint venture with Bank of Chengdu Co Ltd. Last month, it was granted a license in Vietnam to operate a full-scale commercial bank there.

The share price of Affin rose as much as 13.7% Monday to MYR2.66 following the report. At the close, Affin shares were up 12.8% at MYR2.64. Hong Leong Bank shares ended down 0.2% at MYR8.30.

- By K.P. Lee; Dow Jones Newswires; (603) 2026 1233; kwan-por.lee@dowjones.com

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