An office worker walks past an ANZ Bank sign in Sydney.
© AFP/File Greg Wood

KUALA LUMPUR (AFP) - Executive Director of AmMerchant Bank, Pushpa Rajadurai, hailed the move -- which is ANZ's first such partnership in Malaysia -- as a historic first for both countries.

"This is the first Australian investment in the banking sector in Malaysia," Rajadurai, who helped structure the deal, told AFP.

"This investment by ANZ will be double the size of Malaysian investments in Australia so they see it as a very strong partnership," she added.

Under the deal, which comes after two separate rounds of talks over the past two years, ANZ will purchase up to 300 million shares in AmBank Group from its principal shareholder, AmcorpGroup Bhd.

No price was given for this transaction. It is expected to be finalised in the next two weeks, AmBank officials said.

In a longer-term deal, ANZ will buy a combination of convertible shares and exchangeable bonds in transactions worth 1.075 billion ringgit (296 million dollars), giving it a 13.5 percent stake in the AmBank Group.

Both the deals could eventually see the Australian bank hold a total stake of up to 25 percent, making it the single largest shareholder in AmBank Group.

The AmBank Group is the fifth largest of the 10 banks in Malaysia, with assets worth over 70 billion ringgit.

"If they put in so much funds into the company, anybody would ask for board representation," AmBank's group managing director, Cheah Tek Kuang, told reporters when asked about the extent of ANZ's management control after the deal.

However, AmBank officials were quick to emphasise the deal was not a takeover exercise by ANZ, which already has a presence in countries such as China, the Philippines and Indonesia.

"This is not viewed as a takeover or control by a foreigner of a Malaysian banking institution," said Rajadurai, citing other major shareholders AmcorpGroup and the government's Employees Provident Fund.

"The intention of ANZ in all our discussions have been very clear -- that they are coming here in order to (get a) tack on the Malaysian opportunities," she said.

All the deals are subject to approval by Malaysia's central Bank Negara, which has capped equity ownership in banks at 20 percent for companies, AmBank officials said.

"They are looking for above 20 percent but that will be subject to (approval)," said Rajadurai.

All negotiations and agreements will be finalised and submitted to the central bank by the end of January and the deal is expected to be signed by February, AmBank officials said.

Trade in shares of AMMB Holdings, the holding company for AmBank, was suspended last Friday November 17 at 2.99 ringgit and is due to resume on Monday.

©AFP