Prime Minister Datuk Seri Najib Razak said he was open to the idea of Australia and New Zealand Banking Group (ANZ) increasing its stake in AMMB Holdings Bhd (AMMB) to 49% from about 24%.
An increase in foreign equity limit would be beneficial as it would encourage the respective foreign strategic shareholders to take a longer-term view of the local bank and potentially committing more resources to help improve the bank's competitive edge.
He would consider allowing ANZ, Australia's fourth largest bank, to raise its stake in AMMB. Market talk also said AMMB chairman Tan Sri Azman Hashim, who holds close to a 17% indirect stake in the bank, was looking to sell the stake.
AMMB had no comment at this juncture. An ANZ spokesman also declined to comment when asked.
Currently (March 2011), regulations governing the local banking sector include a 30% cap on foreign equity stake in domestic commercial banks. The Prime Minister's suggestion would require Bank Negara approval. This could mean that Bank Negara would have to allow a blanket increase in foreign equity limits for all domestic commercial banks in Malaysia.
Depending on what price the stake is sold at the latest development, if it materialises, should be good for AMMB's share price.
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