Deutsche Bank plans to sell its holding in the Kuala Lumpur-based firm as part of efforts to optimize its capital under Basel III guidelines, said the people, who asked not to be identified as the details are private. Its 13.8 percent interest in Kenanga is valued at about 60 million ringgit ($18 million) based on the current share price, according to data compiled by Bloomberg.
Germany’s largest lender joins Bank of America Corp. and Goldman Sachs Group Inc. in paring stakes in Asian financial institutions as new capital rules known as Basel III make it more expensive to hold minority stakes. Kenanga, founded in 1973, has been expanding by buying ECM Libra Financial Group Bhd. (ECML)’s investment banking unit in 2012 and acquiring control of ING Groep NV (INGA)’s local fund management business last year.
Deutsche Bank spokeswoman Candice Sun declined to comment. A Kenanga official couldn’t immediately be reached.
Kenanga plans to introduce a share option program soon that would see the company issue new shares to management equal to as much as a 15 percent stake, one of the people said. It is seeking to expand outside Malaysia, where it faces rising competition from foreign banks, by setting up branches in Singapore and seeking acquisitions of brokerages in Hong Kong and Indonesia, according to the person.
Deutsche Bank bought a stake in Kenanga from John Hancock International Holdings Inc. in 1991. Earlier this month, the German lender agreed to sell some operations of U.K. wealth manager Tilney Investment Management Ltd. to Permira Advisers LLP and said it will sell a Philippines trust business to BDO Unibank Inc.
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