Latest news with #AMMBHoldingsBhd
Malaysian Reserve
a day ago
- Business
- Malaysian Reserve
China, Singapore likely to perk up if Malaysia eases foreign banking ownership
THE United States is pressing Malaysia to ease up its foreign ownership for financial institutions as both nations are engaged in tariff talks. But such a move may not attract banks from the US, rather it may wet the interests of players from China and Singapore. 'We think more interest will come from regional players rather than the US – especially countries such as China and Singapore which have a strategic stake in Malaysia,' MBSB Research said in a note released today. It listed smaller banks such as AMMB Holdings Bhd, MBSB and Affin Holdings Bhd as potential targets. ' AMMB remains a long-discussed M&A target, due to its relatively smaller size and fundamental improvements seen over the last couple of years – coupled with talk that its key shareholder (founder Tan Sri Azman Hashim) is willing to part with some shares if valuation is acceptable. In the case of AFFIN, Bank of East Asia is said to have been looking to dispose of its holdings for quite some time,' it said. In the last few years, Alliance Bank Malaysia Bhd, another one of the smaller banks in Malaysia, has been linked to a potential alliance or acquisition involving Singapore's largest banking group DBS Group Holdings Ltd. Such a move would pave the way for the region's financial giant to enter the Malaysian market, following the footsteps of Singaporean banks like United Overseas Bank (M) Bhd (UOB) and OCBC Bank (M) Bhd who already operate. The report noted that financial liberalisation does have multiple benefits, most notably driving FDI interest and industry-wide improvements in efficiency and profitability. Unfortunately, this may come with large-scale rationalisation of the work force. In recent reports, Minister of Investment, Trade and Industry Tengku Zafrul Abdul Aziz has indicated that the US has asked Malaysia to lift foreign equity restrictions in strategic sectors as part of its tariff negotiations. The current ruling stipulates that commercial banks must have a 30% cap on foreign ownership, while investment banks and Islamic banks have a 70% cap. However, this rule has been bypassed multiple times – we think this is to avoid single exposure risk, as there are not sufficient domestic investors, added the MBSB Research report. It said that Malaysia's commercial banks have some of the strictest restrictions imposed – hence a liberalisation measure could put it more in line with the rest of the region. It added that Western players like Citibank and Standard Chartered have pulled operations from ASEAN recently, due to over competitiveness. MBSB Research, formerly known as MIDF Research, is part of MBSB Investment Bank Bhd, formerly known as MIDF Amanah Investment Bank Bhd. — TMR
The Star
a day ago
- Business
- The Star
US trade talks raise possibility of more M&A interest in local banks
KUALA LUMPUR: Malaysia's potential move to ease foreign equity limits in its banking sector could open the door to increased merger and acquisition (M&A) interest from regional players, particularly targeting smaller banks such as AMMB Holdings Bhd (AmBank), MBSB Bhd , and Affin Bank Bhd , according to MBSB Research. The research house, formerly known as MIDF Research, said that while the US has reportedly asked Malaysia to lift foreign-equity restrictions in strategic sectors as part of ongoing tariff negotiations, regional investors are more likely to lead the charge. 'We think more interest will come from regional players rather than the United States, especially countries such as China and Singapore, which have a strategic stake in Malaysia,' MBSB Research said. The research house pointed out that several Western players, including Citibank and Standard Chartered, had exited the Asean market in recent years due to intense competition. MBSB Research said AmBank remains a long-discussed M&A target due to its relatively smaller size and improving fundamentals, along with speculation that founder and key shareholder Tan Sri Azman Hashim 'is willing to part with some shares if the valuation is acceptable'. For Affin Bank, the research firm noted that Bank of East Asia is understood to have been seeking to divest its stake for some time. Currently, Malaysia imposes a 30% cap on foreign ownership of commercial banks and a 70% limit for investment and Islamic banks, but these thresholds have often been bypassed. 'We think these thresholds have often been bypassed to avoid single-exposure risk, as there are not sufficient domestic investors,' MBSB Research noted. By comparison, Malaysia's rules are among the most restrictive in the region, the research house said. It said Singapore allows up to 40% foreign ownership in domestic banks, while Vietnam raised its cap to 49% for selected banks in May, up from 30%. Thailand limits foreign ownership in commercial banks to 25%. In Indonesia, the cap is 40%, but higher stakes are possible with Bank Indonesia's approval, provided the acquiring party meets requirements including public listing and sufficient capital strength. According to MBSB Research, financial liberalisation 'does have multiple benefits, most notably driving foreign direct investment interest and industry-wide improvements in efficiency and profitability. Unfortunately, this may come with large-scale rationalisation of work forces.' The research house highlighted several upsides of financial liberalisation, including increased competitiveness in the banking sector through the introduction of global expertise, advanced technology, and improved risk-management practices. It also expects higher foreign capital inflows and stronger corporate governance as a result of greater foreign participation. Additionally, MBSB Research said increased competition could lead to better service quality and higher profitability across the industry, which would support improved valuations. However, it cautioned that liberalisation may also lead to workforce rationalisation, especially as banks consolidate and continue to digitise their operations. Overall, MBSB Research maintained its 'neutral' stance on the banking sector, citing limited near-term re-rating drivers and persistent macroeconomic headwinds. The research house said it continues to favour a bottom-up stock-picking approach, with a preference for defensive names, due to the 'presence of industrywide headwinds, while tailwinds vary on a case-by-case basis'. 'An improved economic outlook remains the core re-rating driver, but we are not expecting this anytime soon,' the research house said, adding that 'sentiment is further weighed down by any possible reinstatement of the goods and services tax and petrol subsidy removal'. The research house named Public Bank Bhd and Hong Leong Bank Bhd as its top picks.
New Straits Times
2 days ago
- Business
- New Straits Times
Relaxed foreign equity rules may spur M&A interest in smaller Malaysian banks
KUALA LUMPUR: Smaller Malaysian banks could be potential targets if the government relaxes its rules on foreign equity ownership in strategic sectors incuding financial services, analysts said. They named the likes of Alliance Bank Bhd, AMMB Holdings Bhd, MBSB Bank Bhd and Affin Bank Bhd that could attract interest from foreign players. MBSB Investment Banking Bhd (MBSB IB) said regional players from Singapore and China with a deeper strategic stake in Malaysia would likely be keener than the Western peers. MBSB IB noted that Western institutions, including Citibank and Standard Chartered, had recently withdrawn from the Asean region, citing intense competition as the main reason. Players from Singapore could be among the suitors due to the republic's geographical proximity, and deeper ties with Malaysia, while China has been forging strategic partnership with Asean as of late. MBSB IB said AMMB has long been viewed as a potential candidate for mergers and acquisitions, given its modest size and the fundamental improvements it has made in recent years. This is further supported by speculation that its major shareholder and founder Tan Sri Azman Hashim may be open to selling part of his stake if the valuation is favourable "In the case of Affin, Bank of East Asia is said to have been looking to dispose of its holdings for quite some time," it added. Malaysia reportedly was considering easing foreign ownership limits in strategic industries, including the banking and power sectors, as part of efforts to reduce the 25 per cent US tariff on the country's goods. Currently, Malaysia imposes a 30 per cent cap on foreign ownership in commercial banks, while foreign equity in investment and Islamic banks is limited to 70 per cent. Affin Hwang Investment Bank said any liberalisation in rules will have to be open to all foreign entities and not just US companies although it relates to negotiations on US tariff on Malaysian goods. "We gather that DBS is interested to acquire a controlling stake in Alliance Bank, and the possible easing of foreign shareholding limits in local banks will be positive for the banking group, given the potential entry of a strong strategic shareholder. "Public Bank Bhd could also see M&A interest from foreign entities and helo clear the current share overhang due to the majopr shareholders' plan reduce their stake," Affin Hwang added.
Barnama
5 days ago
- Business
- Barnama
AmBank Group Projects Moderate Four Pct Malaysia GDP Growth For 2Q 2025
BUSINESS KUALA LUMPUR, July 17 (Bernama) -- AMMB Holdings Bhd (AmBank Group) expects Malaysia's gross domestic product (GDP) to grow at a moderate rate of around four per cent year-on-year in the second quarter of 2025 (2Q 2025), supported by continued front-loading activities that benefit the external sector. Its chief economist Firdaos Rosli said the growth momentum seen in 1Q 2025 is likely to ease in 2Q due to weaker industrial output. 'We think 2Q GDP will ease slightly, mainly due to the softer industrial production index (IPI). But, overall growth should remain in the low four per cent range,' he told reporters after speaking as a panellist at the National Economic Forum 2025 today. Firdaos added that the strong 1Q performance was likely driven by early economic activity, but external challenges are expected to weigh on the subsequent quarter. For the full year, the bank projects GDP growth at 3.8 per cent, which is slightly below the World Bank's forecast of 3.9 per cent, as weaker consumer and investment confidence continue to affect overall economic momentum, reflecting broader signs of a slowdown. 'Tariff uncertainties remain a key concern, particularly given the bilateral nature of trade decisions in the United States,' he said. The Department of Statistics Malaysia is scheduled to announce the advance GDP estimates for 2Q 2025 tomorrow, followed by an official announcement on Aug 15, 2025. On the overnight policy rate (OPR), Firdaos said AmBank expects it to remain at 2.75 per cent until the end of the year. On July 9, Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) reduced the OPR by 25 basis points to 2.75 per cent, a pre-emptive measure to preserve Malaysia's steady growth path amid moderate inflation prospects.
The Star
11-07-2025
- Business
- The Star
AmBank to lower standardised base, lending rates effective July 14
KUALA LUMPUR: AMMB Holdings Bhd (AmBank) will lower its Standardised Base Rate (SBR), Base Lending Rate/Base Financing Rate (BLR/BFR) and Base Rate (BR) effective July 14, 2025. In a notice on its website, AmBank said the SBR will be reduced from 3.0 per cent per annum to 2.75 per cent, while the BLR/BFR will be revised from 6.70 per cent to 6.45 per cent. It said the BR will be revised from 3.85 per cent to 3.60 per cent. "For illustration purposes and subject to change from time to time, the effective interest or profit rate for a 30-year loan or financing of RM350,000 with no lock-in period is 4.0 per cent per annum (SBR+1.25 per cent),' AmBank said. - Bernama
