EPF board and Abu Dhabi commercial bank agree to exclusive negotiations on 25% stake in RHB capital Berhad
Abu Dhabi, 17 December, 2007: The Employees Provident Fund Board (“EPF”) and Abu Dhabi Commercial Bank (“ADCB”) have today agreed to begin exclusive negotiations in relation to a 25 percent equity stake in RHB Capital Berhad (“RHB Cap”).
This move could pave the way for a strategic partnership between EPF and ADCB whilst providing enhanced support to the RHB Banking Group in its pursuit to become one of the top three financial services providers in ASEAN by 2020.
The strategic investment will be subject to, amongst others, approvals from the relevant authorities/parties.
EPF owns 82.23 percent of RHB Cap after making a general offer for the banking group earlier this year. EPF aims to work towards bringing its shareholding down to 35 percent by July next year.
RHB Cap Group is the 4th largest local banking group in Malaysia with its RHB Islamic Bank ranked as the sixth largest Islamic Bank in Asia. It is a well-established brand name with over 200 banking branches across the country serving over 4.0 million customers as well as operations in Singapore, Thailand and Brunei.
In Oct 2007, RHB Cap unveiled a group-wide strategic transformation programme to double its profitability and market capitalization by the year 2010. It’s shares are listed on the main board of Bursa Malaysia.
ADCB is a modernized full-service entity offering a wide range of products and services such as Retail Banking, Wealth Management, Private Banking, Corporate Banking, Commercial Banking, Cash Management, Investment Banking, Corporate Finance including infrastructure project finance (debt/equity), offshore project finance (debt/equity) and strategic investments, foreign exchange products and interest rate, currency and commodity derivative products. It has varied ISO 9001:2000 certified delivery channels such as Call Centre, Internet, Automated Teller Machines (ATM) and Mobile Banking. It also has two branches in India.
ADCB also positions itself as a conventional Bank offering Islamic Solutions to customers. It has several innovative products such as Meethaq Takaful & Savings Programme, Meethaq Mudaraba Overdraft Funding Facility and Meethaq Mudaraba Investment (MMI) Programme. It has participated in Sukuk offerings and markets Sharia compliant equity funds.
ADCB is owned 64.8 percent by the Abu Dhabi Government through Abu Dhabi Investment Council. Its shares are traded on the Abu Dhabi Securities Market (“ADSM”) in Abu Dhabi.
EPF said today that it was pleased to go into negotiations with the leading lender in Abu Dhabi with stated ambitions in Islamic Banking. ADCB was named as the “most Improved Islamic Bank in the Middle East’’ by Euromoney while RHB Cap was named as the “Most Improved Islamic Bank in Asia” by the same publication.
Datuk Azlan Zainol, Chief Executive Officer of EPF said “We believe that Abu Dhabi Commercial Bank offers us a very good fit. It shares our vision of growing RHB Banking Group into a strong financial services group both at home and abroad. Their interest in taking a stake in RHB Cap also confirms what we have long said • that this is a strong franchise with significant potential for the future.’’
Mr Eirvin Knox, the Chief Executive Officer of ADCB, noted that “This banking group has great potential to be a regional player. We believe that ADCB and RHB Cap have strong synergies that can take this financial services group to the next level. We are especially confident of leveraging on each other’s strengths in Islamic banking.’’
The exclusive negotiations between EPF and ADCB will be for a period of 3 weeks and expires on 7 January 2008, unless extended by EPF.
CIMB Investment Bank Berhad is the appointed adviser of ADCB and Goldman Sachs is acting as the adviser to EPF.
