KUALA LUMPUR (Nov 30): Lembaga Tabung Haji (TH) expects further challenges in the face of weak domestic and foreign markets, but remains confident of delivering competitive profits for its depositors, said group managing director and chief executive officer Datuk Seri Amrin Awaluddin.

“This year has been very challenging, our investment profile is no different than the Employees Provident Fund (EPF) and Permodalan Nasional Bhd (PNB). The return will be based on the performance of the stock market, locally and globally.

“In terms of capital market financial performance, [the outlook] will be very challenging for 2022 and 2023. But I am confident that we are able to register good and competitive profits,” Amrin said on Wednesday (Nov 30) at an MIDF Conversations event, which was held virtually and moderated by its group managing director Datuk Charon Mokhzani.

The pilgrims fund announced a profit distribution of 3.1% after zakat for 2021, unchanged from 2020. But the profit distribution was higher at RM2.46 billion in 2021, compared to RM2.24 billion in 2020.

TH reported a profit distribution rate of 3.05% in 2019 (RM2.14 billion total profit distribution), from a rate of 1.25% in 2018 (RM912 million total profit distribution).

Asked how TH will ensure competitive returns against other institutional funds such as EPF and PNB, Amrin said: "Basically we have a Strategic Asset Location (SAA), we have a target in terms of returns for our depositors.  

“Our target would be 0.5% to 1% above Islamic fixed deposit rate, so if the Islamic fixed deposit rate is between 2% [and] 3%, then we are targeting a total return of 2.5% to 3%. Our SAA profiles now reflect our nature of operations," Amrin explained, adding the fund also plans to increase the number of depositors from 8.69 million currently.