KUALA LUMPUR (April 3): Affin Bank Bhd said its largest shareholder Lembaga Tabung Angkatan Tentera (LTAT) has been in touch with a Sarawak state-owned entity for the potential sale of a block of its 33.2% stake in the bank.

This confirms a report by The Edge Malaysia Weekly in the week of April 3-9, 2023, which quoted sources as saying LTAT is in talks to sell a 5% stake in Affin Bank to a Sarawak government entity, with the sale likely to take place as early as this week.

In response to the article, Affin Bank said it has contacted LTAT to inquire about the armed forces fund’s position.

“The company has been made to understand that the parties have been in discussions on the matter. Any transaction that may result from the discussions will be done in accordance with the relevant rules and regulations,” Affin Bank said in a filing.

It added that LTAT is obligated to inform Affin Bank of any changes to their shareholding in compliance with requirements or significant divestment of major shareholders. Any party that acquires 5% or more interest in Affin shares must also notify the bank, it said.

“The company will promptly release a new announcement once further information becomes available,” it added.

According to the report by The Edge, the price tag of the 5% block sale is said to be at prevailing market price of about RM2 a share, or about RM227.35 million for the 113.69 million shares.

The potential sale is understood to be tied to LTAT’s proposed privatisation of Boustead Holdings Bhd, as the fund is seeking to reduce its shareholding in Affin Bank below 50% post-Boustead privatisation, from the indicative 54.1%, to avoid having to obtain Bank Negara Malaysia’s approval.

In the financial year ended Dec 31, 2022, Affin Bank's net profit more than doubled to RM1.3 billion from RM526.93 million, following the RM1.42 billion divestment of its 63% stake in Affin Hwang Asset Management Bhd last year. Revenue rose 47.12% to RM3.3 billion, from RM2.24 billion.