China's No.2 lender may seek Malaysian central bank approval to begin negotiations with EON Capital soon, said the report, citing an industry source.

"It is possible that CCB will be given the nod to start negotiations with EON-Cap under a government-to-government initiative," the unknown source said.

EON Capital is the subject of a takeover battle involving its largest shareholder, Hong Kong-based private equity fund Primus Pacific Partners, and other shareholders, over a plan by Hong Leong Bank to acquire the smaller lender.

Primus filed a lawsuit to stop Hong Leong Bank, Malaysia's sixth largest lender, from taking over EON Capital last year.

The case is ongoing.

The Edge report said it is not known how big a stake CCB is seeking.