EPF seeks strategic partners for RHB Capital?? YAU MOU GAU....CHOR!!!

THE Employees Provident Fund (EPF) plans to sell up to 35 per cent of RHB Capital Bhd to strategic partners as soon as this year after its last-minute sweetened deal won a takeover battle for the country's fourth largest banking group.

The pension fund has offered RM2.25 billion cash to buy Utama Banking Group's 32.8 per cent stake in Rashid Hussain Bhd (RHB), boosting its stake to 61.8 per cent. The deal is due to be wrapped up in four months.

The EPF beat an offer from EON Capital Bhd, a smaller banking group, and another one from a group led by Kuwait Finance House.

It will make an offer to buy the remaining shares in RHB and the rest of shares in RHB Cap. RHB holds 65 per cent of RHB Cap, which in turn owns 70 per cent of RHB Bank Bhd.

Then, EPF will cut its stake in RHB Cap to about 40 per cent and it will delist RHB, chief executive officer Datuk Azlan Zainol told a media conference in Kuala Lumpur yesterday.

The fund also plans to buy Khazanah Nasional Bhd's 30 per cent stake in RHB Bank, worth about RM3.2 billion, in cash. The price is still subject to negotiations.

EPF hopes to bring in two to three strategic partners in two years to help improve RHB Cap. Azlan said a few groups have expressed interest to buy key stakes in the banking group, but he would not name them.

He said KFH could be a potential partner, although both parties have not started talking.

"We have not talked to KFH. Maybe they are keen to take a stake, we don't know. But I believe they are only interested in the Islamic assets, but at the moment no (they are not involved)," Azlan said.

"Hopefully we can invest together (with KFH) ... we don't discount that possibility," he added.

He also said EPF has no intention to turn RHB into an Islamic bank, but will instead grow the group's Islamic banking business.

It will also let professional managers run the daily operation of RHB bank, promising minimal interference from the owner.

Azlan said RHB Group will not buy another lender in the near term.

"No. We believe in consolidation. In the next two to three years we want to let things settle down. But if there are opportunities two years from now, we will like to consider overseas assets," he said. RHB Group has branches in Singapore, Thailand and Brunei, he added.

EPF is spending RM10 billion as initial investment outlay for RHB Group. The fund expects the investment to give it a return on equity of some 5 to 6 per cent at the immediate stage and even higher returns in the future.

"This is a long-term and anchor investment for EPF. It is our mandate to invest in companies that we believe can deliver good returns and has potential to grow. We see this in RHB," Azlan said. He said EPF may later sell some of its shareholdings in other banks.

The deal still needs Bank Negara Malaysia and Ministry of Finance's special approval as banking law does not allow any single company or institution to hold more than 20 per cent of a bank.