KUALA LUMPUR (March 6): Australia & New Zealand Banking Group Ltd (ANZ) said on Wednesday it has agreed to sell a 16.5% stake in Malaysia’s sixth largest lender by assets AMMB Holdings Bhd, in a block trade worth over RM2.1 billion.

The share sale, priced at RM3.85 per share, has been upsized from its initial plan to sell a 9% stake in the company also known as AmBank previously reported by The Edge. Once completed, the sale will reduce its shareholding in AmBank to 5.2% from 21.7%, ANZ said in a statement.

The deal is “in line with ANZ’s strategy of simplifying the bank”, ANZ said. “Following the sale, ANZ will continue to have one nominated director on the AmBank board.”

The Edge reported on Tuesday after reviewing a term sheet that ANZ was marketing up to 297.72 million shares in AmBank at an indicative price of RM3.80 to RM3.85 per share. The accelerated bookbuilding process was set to close on Tuesday night, followed by settlement on Friday.

Currently, foreign shareholding in Malaysian commercial banks is capped at 30%, and ANZ has long made known its intention to let go of its block of shares, but there has been no buyers for its stake — the single largest in AmBank.

AmBank founder Tan Sri Azman Hashim is the second largest shareholder with an 11.8% stake, followed by the Employees Provident Fund’s 9.6%.

ANZ said the proceeds from the sale will increase its Common Equity Tier 1, a measure of a bank’s capital strength, by about 16 basis points but would not have a material impact on profit.

“Capital management considerations will include the capital release from this sale, subject to regulatory approvals,” it added.