ANZ’s 24pc AmBank stake eyed

ANZ is seen making progress on a potential sale of its stake in the Malaysian bank.

25/10/2010 BUSINESS: The Australia & New Zealand Banking Group Ltd. (ANZ) logo is displayed on a bank branch in Sydney, Australia, on Monday, Oct. 25, 2010. Three of Australia's four largest banks are set to post second-half profits that match or exceed earnings before the global financial crisis as bad debts ease in an economy benefiting from the biggest mining boom in a century. Photographer: Sergio Dionisio/Bloomberg

ANZ Bank is seen making progress on a potential sale of its near 24 per cent stake in Malaysian bank AMMB Holdings (AmBank).

The local firm has been eager to trim its minority holdings in Asian banks as part of new CEO Shayne Elliott’s plan to simplify the bank’s operations.

Talk of ongoing negotiations surfaced a couple of weeks ago, with Malaysia’s The Star newspaper on Monday claiming US-based equity fund TPG Newbridge was eyeing off a deal.

ANZ is the largest shareholder in AmBank and paid over $800 million to build a significant position back in 2006 and 2007. It beat out TPG for the right to claim the major stake in Malaysia’s sixth-largest bank.

The holding has become something of a burden in recent times, however, owing to stricter regulatory rules and controversy surrounding compliance breaches that related to a political scandal involving Malaysian Prime Minister Najib Razak.

AmBank agreed to pay $17.6m late last year to settle with the South-East Asian nation’s central bank over compliance issues.

It is unclear how much TPG would be willing to pay for ANZ’s stake.