KUALA LUMPUR (Oct 16): AMMB Holdings Bhd could be the next banking sector merger and acquisition candidate on speculation that its largest shareholder may divest its stake in the former, according to CIMB Investment Bank Bhd.

CIMB analyst Winson Ng wrote in a note that Australia and New Zealand Banking Group Ltd (ANZ), which owned 23.78% in AMMB, might have to sell its stakes in other financial services entities to meet higher capital requirements.

"AMMB Holdings is the most likely candidate for the next bank merger based on the recent
press reports stating that its major shareholder, ANZ, may have to divest its stakes in other banks to meet higher capital requirements.

"We also see the possibility of a merger between Public Bank and Hong Leong Bank due to the former’s succession uncertainties and latter’s ambition to become a bigger bank," Ng said.