AUSTRALIA’S fourth-biggest bank ANZ Group said on Wednesday (Mar 6) it had agreed to sell around 546 million shares, or 16.5 per cent interest, in Malaysian lender AMMB Holdings (AmBank) for about RM2.1 billion (S$596 million).
The sale of shares, made through a block trade, has been upsized to a 16.5 per cent stake from 9 per cent previously agreed, according to a term sheet seen by Reuters.
Shares of ANZ advanced nearly 1 per cent to A$29 by 1241 GMT, their highest since August 2021, outperforming a 0.6 per cent gain in the broader financials sub-index.
The offer price of RM3.85 apiece is at a discount of 8.35 per cent to the closing price of AMMB’s shares of RM4.20 on Tuesday.
The sale comes three years after ANZ announced it would write down the value of its investment in AMMB after the Malaysian bank settled a claim linked to the massive financial scandal at state fund 1MDB.
ANZ’s shareholding in AmBank will reduce to 5.2 per cent from 21.7 per cent once the sale is completed on Mar 8.
The deal is in line with ANZ’s strategy, which includes shrinking key business lines involving low-returning institutional loans and its exposure to retail and wealth banking in Asia as it looks to boost its return on equity.
Proceeds from the sale will increase ANZ’s CET1 ratio by 16 basis points, but would not have an incremental impact on profits, the bank said.
The deal, however, could insinuate the possibility of a higher dividend yield for future shareholder payments as the bank highlighted that capital management considerations will include proceeds from the sale.
“Facing fierce competition at home while anticipating significant headwinds from slimming net interest margins, streamlining capital resources and market exposure appears to be a sensible move for ANZ to maintain its shine among peers,” Hebe Chen, an analyst with IG Markets told Reuters.
ANZ shares have added more than 3 per cent in value since the Australian Competition Tribunal’s green light for the lender’s proposed A$4.2 billion (S$3.7 billion) buyout of Suncorp’s banking assets. REUTERS
