ANZ’s stake in AmBank may be overvalued, says CLSA

ANZ’s stake in scandal-ridden AmBank is overvalued, a leading analyst has warned.

CLSA analyst Shayne Elliott says ANZ’s stake in AmBank may have to be written down by the bank. Malaysia’s AmBank . Picture: AFP

ANZ’s stake in Malaysia’s scandal-ridden AmBank is overvalued in ANZ’s books, as is its $5 billion-plus portfolio of Asian investments, a leading industry analyst has warned.

CLSA banking analyst Brian Johnson’s comments raises the prospect that ANZ’s Asian investments may need to be written down when chief executive Shayne Elliott reports half-year results next Tuesday.

The bank was trying to sell minority stakes in AmBank and Indonesia’s Panin but has yet to find a buyer.

Mr Johnson raised concerns about AmBank’s links to Malaysian sovereign fund 1MDB, where billions have allegedly been looted by the country’s Prime Minister, Najib Razak, and his associates. Mr Najib denies any wrongdoing. On Tuesday, 1MDB defaulted on a $US1.75bn ($2.29bn) bond by failing to make a $US50 million coupon payment after a dispute with Abu Dhabi state fund IPIC, which guaranteed the bonds.

Mr Johnson said 1MDB “seems to be at the epicentre of the problems plaguing Malaysia — alleged corruption, oil weakness, ringgit weakness and the imposition of a GST”.

“1MDB has $US14bn of debt and as much as $US3.8bn has ‘disappeared’ with ongoing investigations across the world.”

Tuesday’s default triggered cross-defaults on two Islamic law-compliant bonds — “sukuks” owed by 1MDB.