Abu Dhabi will remain a substantial shareholder in Malaysian lender RHB Capital and is supportive of a potential merger involving the bank, Malaysian Prime Minister Najib Razak said.

RHB, Malaysia's fifth-largest lender with a market value of about $7.2 billion, is presently a takeover target of Malaysia's two largest banking groups, CIMB Group and Malayan Banking (Maybank).

Abu Dhabi Commercial Bank (ADCB) on Friday signed an agreement to sell its 25 per cent stake in RHB Capital to Aabar Investments, an Abu Dhabi investment fund, for 10.80 ringgit per share.

The signing was witnessed by Abu Dhabi's Crown Prince Shaikh Mohammed bin Zayed Al Nahyan, who is in Malaysia for an official visit.

"Shaikh Mohammed informed me that Abu Dhabi will continue to hold a substantial stake in RHB Capital," Razak said.

"This clearly signals Abu Dhabi's long-term commitment and confidence in the Malaysian banking sector and leadership...we are also delighted that Aabar is supportive of a potential local banking sector consolidation with RHB."

Analysts have said the sale to Aabar could complicate a merger bid between RHB and either CIMB or Maybank as it set the floor for the RHB takeover, pricing RHB at a minimum 2.25 times book value. RHB's book value was 4.79 ringgit per share as of March 31.

"The price may scare away Maybank and CIMB as the 2.25-2.3 times book is a bit expensive," HwangDBS Vickers Research senior analyst Lim Sue Lin said.

Maybank has said it will offer RHB a merger proposal by the end of June. Aabar Investments is majority-owned by the Abu Dhabi government investment vehicle International Petroleum Investment Corp.

"The purchase of this stake in RHB adds a core asset to Aabar's financial services investments portfolio," Aabar's chairman Khadem Al Qubaisi said.

"We are impressed by the strong performance achieved by RHB and are excited by the opportunity to potentially participate in domestic consolidation and regional expansion."