Little impact from ANZ’s sale of AMMB stake

UOBKH Research said it expects things to be “business as usual” operationally for AMMB.

PETALING JAYA: Australia-based ANZ Group’s sale of a 16.5% stake in AMMB Holdings Bhd is unlikely to have a significant impact on the latter’s business operations, analysts say.

UOB Kay Hian Research (UOBKH Research) said in a report it expects things to be “business as usual” operationally for AMMB.

“Operationally, ANZ’s exit is not expected to significantly impact the AMMB group, as ANZ’s management had already largely withdrawn from active involvement within the group, assuming a passive role,” the research house said in a report yesterday.

UOBKH Research added that ANZ’s intention to exit its AMMB position did not come entirely as a surprise, given the Australian group’s longstanding plan to divest from the investment.

“However, the upsized portion of the divestiture suggests robust demand for AMMB shares in the market, particularly considering the discounted pricing, which values AMMB shares at an attractive 0.60 times financial year 2025 price-to-book value in exchange for a forecast return on equity of 8.5%.”

ANZ, Australia’s fourth largest bank, announced earlier this week that it is disposing of 16.5% of its 21.7% stake in AMMB for about RM2.1bil, via a block trade at a price of RM3.85 per share.

UOBKH Research said the significant block of shares being placed out may lead to a near-term share overhang.

“To provide context, it is worth noting that Abu Dhabi-based Aabar Investments PJS’ disposal of RHB Bank Bhd was divided into four separate blocks between August 2018 and December 2020, with each placement block being relatively smaller, ranging from 3%-6%.

“Observations indicate that it took one-to-two months for the market to absorb each of these smaller blocks. Given the larger size of ANZ’s 16.5% placement of AMMB shares, it is reasonable to anticipate a longer period of six-to-eight months for the market to fully digest this significant divestiture.”

Separately, Hong Leong Investment Bank Research (HLIB Research) also said it was not surprised by ANZ’s decision to dispose of its stake in AMMB.

“This does not come entirely as a surprise, except perhaps for its timing, since ANZ always had the intention to exit its AMMB position.

“That said, it appears the market has a good appetite for the discounted shares, given AMMB’s solid fundamentals. Thus, we are not particularly concerned with the near-term overhang on AMMB’s share-price performance.”

For its latest financial performance, AMMB posted a 22.3% rise in net profit to RM543.4mil in the third quarter ended Dec 31, 2023 from RM444.2mil in the same period a year ago.

Its revenue, however, eased to RM1.15bil from RM1.22bil previously. For the nine-month period ended Dec 31, 2023, net profit was higher at RM1.39bil compared with RM1.28bil in the same period in 2022.

Over the nine-month period, the group’s net profit was RM1.39bil, compared with RM1.28bil in the first nine months of financial year 2023, while revenue was RM3.48bil against RM3.55bil in the previous corresponding period.

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