The Sarawak government, which is already the largest shareholder of Affin Bank, is said to be eyeing a stake in AmBank with a view to merging the two lenders.
Citing sources, business and financial weekly The Edge said the Sarawak government had already approached Azman Hashim, founder of the AmBank Group.
Azman holds an 11.83% stake in AMMB Holdings Bhd, which comprises AmBank, AmInvestment Bank Bhd, and AmBank Islamic Bhd.
“Friendly parties” representing Sarawak are said to have approached Azman’s representatives to express an interest in his stake.
The AMMB Holdings counter closed at RM5.20 yesterday, valuing Azman’s stake in the banking group at RM2.07 billion.
However, the sources said talks had yet to yield results as pricing was a key issue. Another issue is said to be Sarawak’s desire to have Affin Bank take charge in the merged entity.
If the merger comes through, it will make the lender the fourth-largest banking group in terms of assets.
“Sarawak is very keen to have control of a much larger bank,” the source was quoted as saying.
Azman, 86, is AMMB’s honorary adviser and chairman emeritus.
Another source said the Sarawak government would hold a maximum 20% stake in the merged banking entity.
AmBank’s assets make it the sixth-largest of Malaysia’s eight banking groups while Affin Bank is seventh.
The Sarawak government previously held a 4.81% stake in Affin Bank through its wholly-owned entity SG Assetfin Holdings. It acquired additional shares from the Armed Forces Fund Board and Boustead Holdings Bhd last year to raise its stake to 31.25%.
Affin Bank closed at RM2.65 yesterday, giving it a market capitalisation of RM6.36 billion.
Sarawak is also said to be considering stakes in Bank Muamalat Bhd and Kuwait Finance House Bhd (KFH) despite indications that Islamic banking is “not quite its cup of tea”.
DRB-Hicom Bhd holds a 70% stake in Bank Muamalat and sovereign wealth fund Khazanah Nasional Bhd has the remaining 30% stake.
There is an unresolved issue with DRB-Hicom’s stake in Bank Muamalat. Bank Negara Malaysia regulations require the company to pare down its shareholding to 40%.
This requirement was imposed when the central bank approved DRB-Hicom’s purchase of the stake from Bukhary Capital Sdn Bhd, owned by tycoon Syed Mokhtar Albukhary, for RM1.07 billion in 2008.
Syed Mokhtar currently owns 55.92% of DRB-Hicom’s shares.
KFH announced last year that it was winding down its operations in Malaysia and looking for a buyer to take over its retail loan portfolio. However, talks with Sarawak have reportedly yet to yield any results.