This article first appeared in The Edge Malaysia Weekly on January 31, 2022 - February 6, 2022

AMMB Holdings Bhd chairman Tan Sri Azman Hashim says his decision to retire from the banking group in which he is a major shareholder was not made in haste.

“It is not sudden,” he tells The Edge in an email response, when asked about the seemingly sudden move. “My decision to retire has been made known to my colleagues in the banking group for some time now. It was a matter of an appropriate time. I am already 82 years old.”

The move, which AMMB announced last Thursday, took some in the industry by surprise given that Azman — a key figure in the group he co-founded because of his 11.83% shareholding — had previously indicated that he would remain with the group for as long as he is holding his stake.

Azman did not respond to a question on whether there could be any upcoming developments with his stake, but stressed that he would continue to be involved in the group in his new role upon retirement. “I am still a major shareholder and keeping my shares. I am still in the loop as chairman emeritus/honorary adviser and accessible to management for ideas/advice.”

In its announcement, AMMB said Azman wished to retire from his role as non-independent non-executive chairman and director on March 31, which is the end of the group’s financial year. The succession plan for the transition of chairmanship is in place and an announcement would be made in due course, it added.

It is still early days, but names being bandied about in the market as his potential successor include Datuk Seri Abdul Hamidy Abdul Hafiz, the chairman of AmBank Islamic Bhd and an independent director of AmBank Bhd.

Few bankers in leadership positions have had Azman’s staying power. A banker for more than six decades now, he has gone through some of the industry’s most challenging times, from the 1997/98 Asian financial crisis and consequent consolidation of 54 banks to 10 (and subsequently to just eight), to the current Covid-19 pandemic, to name a few.

Some analysts note that Azman’s exit as AMMB chairman makes sense, given Bank Negara Malaysia’s preference for banking groups to be helmed by independent chairpersons.

They note that Azman’s retirement is similar to that of another banking veteran, Public Bank Bhd’s Tan Sri Teh Hong Piow. In August 2017, Teh, who held a 23.54% stake, announced that he would relinquish his chairmanship in January 2019. He was made chairman emeritus upon his retirement.  “[Azman’s exit process] is not without precedence,” a banking analyst says.

As with Teh, Azman has no family member keen on taking over the business. “I could be there another 10 years if I survive. If I am chairman, I will still be holding my stake. If I have no stake, I won’t stay,” Azman stated in an interview with The Edge in 2019.

Azman’s impending retirement has inevitably cast the spotlight on his shareholding at the country’s sixth-largest banking group by assets.

Given his significant 11.83% stake, he holds the key to potential mergers and acquisitions at AMMB. He is the second-largest shareholder after Australia and New Zealand Banking Group (ANZ) (21.68%), which is widely known to be eyeing exit options.

Azman’s latest move has prompted market speculation about a potential revisit of an AMMB-RHB Bank Bhd merger, says another banking analyst, although it remains to be seen whether this will actually happen.

RHB CEO Datuk Khairussaleh Ramli, who tendered his resignation last week, is set to rejoin larger rival Malayan Banking Bhd as its new president and CEO from May 1, as the incumbent Datuk Seri Abdul Farid Alias has opted not to renew his contract.

In June 2017, AMMB and RHB had explored a union, but called off talks after three months, as they could not agree on mutually acceptable terms and conditions. Interestingly, a preliminary attempt by key shareholders of the two banks in mid-2015 also did not come to pass. The Employees Provident Fund is a major shareholder in both banks, holding 8.26% in AMMB and 42.17% in RHB.

In an interview with The Edge last October, Azman said a stake sale was “not really” something he was focused on at the moment, but given that ANZ is known to be looking for exit options, he has to stay alert.

“It’s not going to be an easy exercise, you know, especially with ANZ’s block [of shares]. It’s very big, involves a lot of money [for the prospective buyer], so it takes a while,” he said.

ANZ’s stake was valued around RM2.4 billion based on AMMB’s closing price of RM3.32 last Friday, while Azman’s was valued at RM1.3 billion. The lender has a market capitalisation of RM11 billion.

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