x Abu Dhabi, UAEThursday 18 January 2018

Abu Dhabi Commercial Bank weighs sale of RHB Capital stake

Abu Dhabi Commercial Bank is considering offloading its stake in Malaysia's RHB Capital on Aabar Investments, a holding company owned by the Abu Dhabi Government.

Abu Dhabi Commercial Bank is considering selling its 24.9 per cent stake in RHB Capital, Malaysia's fifth-largest bank.

ADCB received approval from Malaysia's central bank on Friday to begin discussions about a sale to Aabar Investments, owned by the Abu Dhabi Government, according to a statement on the Abu Dhabi Securities Exchange website.

The discussions were part of a "strategic review" of the investment in RHB Capital, the statement said.

ADCB bought the stake in 2008 for around Dh4.5 billion (US$1.22bn) in what was then hailed as the biggest investment from the Gulf into Malaysia's financial sector.

The Abu Dhabi lender has for weeks been gauging interest among possible suitors for its RHB Capital holding.

Earlier reports said Maybank and CIMB, two other Malaysian banks, planned to make bids for it. Sumitomo Mitsui Financial Group of Japan and Carlyle Group, a global buyout company, were also said to be interested.

A possible takeover of the stake by Aabar would add to a rapidly growing portfolio of companies in sectors ranging from aerospace to cars.

Aabar, which is controlled by the Abu Dhabi Government-owned International Petroleum Investment Company, has a stake in Daimler, the German car giant, and Virgin Galactic, Sir Richard Branson's commercial space flight venture.

Aabar also owns part of the Mercedes GP Formula One team and about 5 per cent of UniCredit, one of Italy's biggest banks.

The Abu Dhabi company took over AIG's former Swiss private banking unit in 2009 and renamed it Falcon Private Bank.

Aabar's total assets are worth more than $10bn, according to financial reports from last year.

A sale of RHB by ADCB to Aabar would effectively transfer the stake from one Abu Dhabi Government-owned entity to another.

ADCB itself is majority-owned by the Abu Dhabi Investment Council, a government investment company.