Malaysia’s Employees Provident Fund is expected to approach Barclays and the Royal Bank of Scotland, along with other international banks, to buy a 20 per cent stake in Rashid Hussain, a local bank that the state pension fund recently acquired.
Azlan Zainol, EPF’s chief executive, said on Wednesday that the fund planned to cut its stake in Rashid, Malaysia’s fourth-largest lender, to 35 per cent by selling stakes of 20 per cent each to two new investors.
A person familiar with the situation said that EPF was interested in offering a 20 per cent stake to either of the two British banks or an unnamed Japanese bank, while hoping to attract a private equity fund for the other 20 per cent stake by the end of the year. Malaysia has historically enjoyed strong business ties with the UK and Japan.
Neither Barclays nor RBS would comment, but it is unclear whether either bank would be interested. In the past Barclays has steered away from buying minority stakes and, while RBS has a small shareholding in Bank of China, it generally prefers to take control of banks in which it invests. Both banks have expressed interest in Asia, but neither has identified Malaysia as a key priority for expansion.
EPF came under fire after it recently bought Rashid in a $3.6bn deal following a takeover battle that also involved rival bids by Kuwait Finance House and EON Capital, a small Malaysian bank.
The Democratic Action party, Malaysia’s main opposition party, criticised the deal, saying EPF lacked expertise in operating a commercial bank and that its record of takeovers of other businesses had been poor.
EPF has defended the deal, saying that it needed to protect its earlier investment of 30 per cent in Rashid, the value of which had fallen below its initial purchase price.
Rashid has struggled in recent years under debts of about M$3.5bn ($1.01bn).
Additional reporting by Peter Thal Larsen in London