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Hong Leong Bank owner exploring options for stake in Malaysian lender

Malaysian billionaire Quek Leng Chan is exploring options for his stake in Hong Leong BankReuters reported citing unnamed sources familiar with the matter.

The business tycoon is open to both, a merger and divesture of a stake in the Malaysian bank, which is part of the conglomerate Hong Leong Financial Group.

Chan controls Hong Leong Financial Group, which has a 62% stake in Kuala Lumpur-headquartered Hong Leong Bank.

Details about the shortlisted candidates for the merger or how much stake Chan plans to sell were not immediately known.

The move by the bank’s shareholder comes as the lender’s shares have soared this year and there are succession issues, the sources said, adding that there was no formal proposal underway and that Chan is yet to take a decision.

Any potential divesture of stake in Hong Leong Bank is expected to be of a minority stake, the news agency said citing sources.

Bursa Malaysia-listed Hong Leong Bank has operations in Singapore, Hong Kong, Vietnam, Cambodia and China.

Chan acquired the bank through Hong Leong Financial Group in 1994.

Notably, local laws require banks in Malaysia to secure the central bank’s approval before they can start formal talks for deals that include the transfer of stake.

Some of Malaysia’s mid-to-large banks held merger talks more than five years ago, but a deal did not materialise due to tough negotiations and political considerations, bankers familiar with the matter say.

In April this year, the central bank of Malaysia awarded digital banking licences to five applicants.

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