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Sat 26 Mar 2011 02:49 PM

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ADCB hires Goldman Sachs to sell stake in Malaysian bank

Proposed sale is expected to draw interest from Chinese banks and other Asian buyers

ADCB hires Goldman Sachs to sell stake in Malaysian bank
Abu Dhabi Commercial Bank. (Getty Images)

Abu Dhabi Commercial Bank (ADCB) has hired Goldman Sachs to sell its 25 percent stake in Malaysian bank RHB Capital valued at $1.4 billion, two sources with direct knowledge of the matter told Reuters on Saturday.

ADCB had shortlisted three to four banks and was still deciding whether to appoint a second adviser for the sale, sources added.

The proposed sale is expected to draw interest from Chinese banks and other Asian buyers due to Malaysia's rapidly growing economy, though lack of control could deter strategic buyers from bidding aggressively, sources said.

An ADCB spokesman did not offer an immediate comment while a Hong Kong-based spokesman for Goldman Sachs was not available for an immediate comment.

Sources declined to be identified as the information had not been formally made public yet.

A 30 percent foreign ownership limit in Malaysian banks has

proved to be a stumbling block for foreign banks planning to

expand in Malaysia through acquisitions.

But in a recent interview to Reuters, Malaysian Prime

Minister Najib Razak signalled that he was ready to ease bank

ownership rules and would consider allowing Australia & New

Zealand Banking Group Ltd to double its stake in

Malaysian lender AMMB Holdings to 49 percent.

Malaysia's economy is forecast to grow by 5-6 percent in

2011, driving up demand for consumer loans and credit cards,

which is the main attraction for the banks.

Sources said Bank of America Merrill Lynch,

Malaysian investment bank CIMB and JP Morgan were the other banks who made it to the shortlist.

A BofA spokesman declined comment while JP Morgan and CIMB

were not available for comment.

It was not entirely clear why ADCB is planning to sell its

stake at a time when several Asian and some European and US

financial institutions are sniffing around to buy banking assets

in Southeast Asia.

"ADCB has failed to have significant influence over RHB or

provide much banking expertise," one of the sources said. "Now

that RHB's share price is hovering above what ADCB had paid,

ADCB probably thinks the best option is to exit," the source

added.

ADCB paid 7.20 Malaysian ringgit per share to buy the stake

in 2008. The stock closed at 8.30 ringgit on Friday.

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