RHB Capital suitors to be shortlisted to 6

China banks said to be showing little interest in the 25% stake

PETALING JAYA: The number of interested parties in Abu Dhabi Commercial Bank's block in RHB Capital Bhd will be shortlisted to six by middle of next month, sources said.

So far, 15 banks and private equity firms have shown interest in the 25% stake, the sources said.

Speculation was rife that the suitors included banks from China.

However, there is no conclusion yet as to who the ultimate buyer would be. So far, China banks have shown very little interest in the block, the sources told StarBiz.

Another Chinese bank emerging as shareholder in one of Malaysia's banking groups is a possibility although many will ask what the existing China banks in the country have achieved so far.

As long as there was no cross-holding by a single institution, the application might be considered, said another source, However, factors such as synergies are important.

So far, two Chinese banks - Bank of China (Malaysia) Bhd and Industrial and Commercial Bank of China (ICBC) Malaysia Bhd - were awarded licences in 2000 and 2009 respectively.

Bank of China offers services such as overdraft, savings and current accounts, cashier's orders, trade finance, remittances and project financing.

ICBC Malaysia, which has four branches, offers personal (accounts and services, investment, credit facilities), corporate (trade financing, credit facilities, global payments and cash management, treasury products and services, investment banking) and internet (account management, transfers, fixed deposit) banking.

Analysts are watching for developments in the purported interests of DBS owned by Singapore's Temasek which, in turn, holds 14.8% of Alliance Financial Group (AFG) and Australia and New Zealand Banking Group (ANZ) which owns 24% of AMMB.

If ANZ was to acquire a stake in RHB, it would need to merge AMMB with RHB.

In the case of DBS possibly buying the RHB stake, it is unclear if AFG will be merged with RHB or Temasek will sell off its stake in AFG, as investors can only hold one banking licence.

Reuters also reported last week that the Carlyle group and TPG Capital were making a joint-bid for a US$1.5bil stake in RHB Capital.

However, it may be difficult for private equity firms to get the nod from the authorities, following the court battle between Ng Wing Fai of Primus Pacific Partners Ltd and the other directors of EON Bank Bhd.

Although Primus lost the case in the court yesterday, analysts reckoned it might be an experience to be avoided in future. Moreover, there is little synergy between private equity and banks.

Primus, which holds a 20.2% stake in EON Capital Bhd, was challenging the other directors on their decision to table the takeover bid (which Primus considers undervalued) from Hong Leong Bank to shareholders. (Source:The Star Online)