Grab eyes majority stake in Malaysia’s 4th largest bank: sources

Ride-hailing giant Grab is in talks to buy a majority stake in Malaysian banking group AMMB Holdings (AmBank), people familiar with the matter told Tech in Asia.

Pic: Ambank

Two industry insiders said talks were still in preliminary stages but that Grab is among the names seeking to snap up a stake in Malaysia’s fourth-largest bank by assets. AmBank, which is listed on Bursa Malaysia, has a market value of 12 billion ringgit (US$2.74 billion).

Tech in Asia understands that investors have their sights on AmBank’s banking and asset management arms, following the bank’s settlement of claims linked to the multibillion-dollar 1Malaysia Development Bhd (1MDB) scandal.

Business publication The Edge first reported the deal on May 7, saying Grab was looking to take over the stakes of AmBank’s two largest shareholders: Australia and New Zealand Banking Group (ANZ) and Azman Hashim, the Malaysian bank’s former chairman.

ANZ owns a 21.68% stake in the bank while Azman, a veteran banker who led AmBank from 1982 to January 2022, holds 11.83%.

In response to an enquiry by Tech in Asia, A Grab spokesperson told Tech in Asia the super app would not comment on “rumors or speculation” while ANZ did not respond to queries from The Edge. We have also reached out to AmBank for comment.

The industry insider Tech in Asia spoke to didn’t divulge how much Grab was willing to fork out for the deal, but added that the Singapore-headquartered firm’s physical banking strategy in Malaysia appears to be in line with a move the ride-hailing giant recently made in Indonesia by purchasing a 16.3% stake in Bank Fama International.

Grab’s interest in traditional banking and AmBank’s search for investors come on the heels of a few recent developments.

Firstly, GXS Bank, a joint venture between Grab and Signtel, recently snagged a digital banking license from Bank Negara Malaysia. GXS has formed a consortium with Kuok Brothers, the investment vehicle of Malaysia’s wealthiest tycoon, Robert Kuok. Grab said in an April 29 press statement that GXS would own 55.45% of the proposed digital bank, subject to regulatory approval.

Secondly, AmBank has meanwhile reached a settlement with the Malaysian government on all outstanding claims and actions regarding transactions around 1MDB. The bank had to pay 2.83 billion ringgit (US$645 million) as part of the settlement despite denying wrongdoing on its part in 2017.

AmBank’s settlement is linked to the bank’s handling of 5 billion-ringgit (US$1.14 billion) bonds issued by 1MDB in May 2009. The 30-year government-guaranteed bonds, which pay an interest rate of 5.75%, were almost stolen and flipped by fugitive financier Low Taek Jho – known as Jho Low – and collaborators.

Malaysian enforcement agencies investigated the issuance of the bonds, including the involvement of AmBank’s senior staff in facilitating the flipping of the bonds. Investigators found that Jho Low and his co-conspirators had made a profit of 600 million ringgit (US$136 million) at 1MDB’s expense.

Thirdly, since 2016, ANZ’s has looked to lessen its exposure to Asia, closing down businesses in several countries in the region, including Singapore, and announcing that it was considering the sale of minority stakes in banks across Malaysia, Indonesia, and China.