AMMB options widen for ANZ

ANZ must be weighing its options around its banking investment in Malaysia, as local powerhouse RHB Capital pursues a merger with AMMB.

Malaysian news service Bernama yesterday reported RHB Capital Bhd "may revisit earlier market speculation of a potential merger with AMMB Holdings Bhd given that this is a better fit and a marriage of equals."

The news service cited commentary on Friday by OSK Research Sdn Bhd, which said the merger would propel AMMB from being the sixth largest bank to the fourth largest in Malaysia.

CIMB Group Holdings Bhd and Malayan Banking Bhd earlier this year said they would not pursue merger opportunities with RHB Capital. However, the entry of Aabar Investment has complicated matters in terms of shareholding control.

OSK outlined one, now superseded, theory: "Previously, market talk was of Abu Dhabi Commercial Bank (ADCB) selling its 24.9 per cent stake to ANZ.

"This would have enabled ANZ to maintain its shareholding in the merged entity above the 20 per cent level, while the Employees Provident Fund would have gradually pared down its stake and left ANZ as the dominant controlling shareholder," it said.

However, ADCB sold its RHB shares to Aabar Investment instead.

Bernama reported this means that any merger between RHB and AMMB would result in ANZ's stake in the merged entity being diluted to below 20 per cent.

One of ANZ's minority holdings in Asian banks, AMMB Holdings Berhad contributed A$155 million to ANZ's profit in the year to September 2015, and accounted for 30 per cent of all the profit from what ANZ terms "partnerships".

ANZ placed a value of $1.5 billion on its 24 per cent stake in AMMB in its 2014 annual report.