TAIPEI (May 14): Mega Financial Holding Co Ltd is in talks to buy a stake of Malaysia's RHB Bank Bhd , Taiwan's Commercial Times newspaper reported, in a major step for one of Taiwan's top five financial holding companies to expand into Southeast China.

The move comes after the Taiwanese government said recently it wants Mega to lead other state-run banks to seek mergers in a bid to consolidate the over-crowded sector. The ultimate goal is to be able to compete on the broader Asian stage.

In addition to the potential stake purchase, Mega is also looking into buying a 40 percent stake of Bank Mestike Dharma, the Commercial Times reported, citing unidentified industry sources.

Neither Mega nor RHB officials were immediately available for comment. - Reuters