Logo of Phnom Penh Post newspaper Phnom Penh Post - ANZ sells stake in Royal venture

ANZ sells stake in Royal venture

Content image - Phnom Penh Post
Afternoon traffic passes an ANZ Royal Bank branch in Phnom Penh’s Daun Penh district in March of 2016. Vireak Mai

ANZ sells stake in Royal venture

Australia and New Zealand Banking Group (ANZ) announced yesterday that it had reached an agreement to sell its 55 percent stake in Cambodian joint venture ANZ Royal Bank to J Trust, a Japanese holding company listed on the Tokyo Stock Exchange.

The decision to sell its stake is in line with ANZ Group’s ongoing strategic review of international partnerships, in order to simplify their business and operate wholly owned entities in the region, according to the announcement.

The company did not disclose the value of the deal and said the transaction has been approved by the Royal Group, the local partner in the venture.

The proceeds, however, including transaction costs, taxes and the release of accumulated foreign currency translation reserves equates to a A$30 million (US$22.5 million) loss on sale completion for ANZ, according to the announcement.

The agreement remains subject to final regulatory approval from the National Bank of Cambodia and the Ministry of Commerce.

ANZ Group Executive Farhan Faruqui said this joint venture has been beneficial to both ANZ and the Royal Group over the past 13 years, with ANZ Royal now a strong and successful bank.

“We view the business environment in Cambodia as attractive and recognise it’s an important growth economy in the Asean region; however the sale is in line with our efforts to exit minority investments and partnerships to focus on our Institutional business in Asia”, said Faruqui.

ANZ also announced a withdrawal from the Philippines and the sale of Shanghai Rural Commercial Bank in China.

“We remain committed to our Institutional presence in Asia. Our regional network is an important differentiator for ANZ and key to our ambition to be the best bank to support companies with trade and capital flows throughout the region,” said Faruqui.

J Trust is a Japanese diversified financial holding company listed on the Tokyo Stock Exchange with a current market capitalisation of $800 million.

Smooth transition
In the press release on Thursday, Royal Group, owned by tycoon Kith Meng, expressed thanks to ANZ for its efforts over the past 13 years in building a strong world-class bank and welcomed J Trust as a new partner Royal Group said it looks forward to an exciting period of growth and expansion for the bank.

“Cambodia’s economy will continue its impressive growth and J Trust along with Royal Group will be actively assisting this growth,” the group said.

J Trust has operations in five countries including banking operations in South Korea and Indonesia.

ANZ will continue to own its 55 percent stake and manage the ANZ Royal business for up to 12 months, working closely with J Trust to ensure a smooth transition of ownership.

A rocky road
The relationship between ANZ and the Royal Group has seen some controversy in the past.

Last year, the Australian financial institution distanced itself from its local partner following a report by Cambodia’s National Police that linked Meng to illegal timber smuggling operations.

A report published by Cambodia’s National Police this week accused Royal Group, owned by Meng, of laundering illegal timber through the Lower Sesan II hydropower project. It accused the conglomerate of using its licence to clear the reservoir area as cover for its subsidiary’s laundering of timber from elsewhere.

Additionally, ANZ Royal Bank faced scrutiny in 2014 for its involvement with a sugar plantation belonging to ruling party Senator Ly Yong Phat, after the operation was linked to land disputes and child labour scandals.

MOST VIEWED

  • Prince injured, wife dies after accident

    THE wife of former First Prime Minister Prince Norodom Ranariddh, Ouk Phalla, 39, died while the prince was “severely” injured following a road accident in Preah Sihanouk province’s Prey Nub district on Sunday morning, officials said. Rananriddh, who is also the president of the Funcinpec

  • Guards protest dismissals, reject claims of sharing naked photos of child

    Some 20 former security guards at the US Embassy in Phnom Penh protested on Tuesday against their dismissal. They accused their employers of falsely claiming they had viewed and shared child pornography from their mobile phones as grounds for their termination. In total, 32 personnel were dismissed

  • Funcinpec urges probe into deadly Preah Sihanouk accident

    THE Funcinpec party has urged the government, especially the Ministry of Interior, to investigate the traffic accident in Preah Sihanouk province which left Prince Norodom Ranariddh badly injured and his wife Ouk Phalla dead. Funcinpec Vice President You Hokry told reporters at Botum Votey pagoda,

  • We’re going to Wisney World!

    More than 6,000 mostly Chinese attendees witnessed the inauguration ceremony of a $1 billion Sihanoukville resort project called Wisney World in the capital on Wednesday. The event on Koh Pich, attended by several senior Cambodian government officials, is a joint venture between China’s AMC International and