Affin Bank rises as much as 8% as Sarawak said to be closing in on stake increase

Monday 13 May 2024

KUALA LUMPUR (Jan 30): Shares of Affin Bank Bhd rose as much as 20 sen, or 8%, to RM2.70 on Tuesday amid news of the Sarawak government nearing a deal to increase its stake in the bank.

Sarawak Premier Tan Sri Abang Johari Abang Openg, who appeared at Affin's market outlook event in Kuala Lumpur as an honoured guest, was quoted as saying that the state government is “close” to concluding its negotiations to buy Affin's shares from the Armed Forces Fund Board (LTAT).

But at market close, the counter eased to RM2.62, still up by 12 sen, or 4.8%, with 18.58 million shares traded. At its current price, Affin Bank's market capitalisation stands at RM6.15 billion.

Affin Bank's higher closing was in contrast to the performance of other listed banks such as Public Bank Bhd, RHB Bank and AMMB Holdings Bhd, which were all in the red at market close.

Earlier this month, Affin Bank confirmed a report by The Edge that the Sarawak State Financial Secretary was in talks with LTAT to potentially increase its stake in the bank.

According to the report, the Sarawak government was keen to buy an additional 15% of Affin from LTAT, which has a direct stake of 29.7% in the banking group, while LTAT’s wholly-owned unit Boustead Holdings Bhd has a 20.65% stake. As at Dec 29, 2023, the state government held a 4.8% stake in the bank.

If the deal is successful, the Sarawak government will become the third-largest shareholder of Affin, holding an approximate 20% stake. The second-largest shareholder is The Bank of East Asia, with a 23.79% stake.

Meanwhile, LTAT will retain its position as the largest shareholder, maintaining a combined direct and indirect stake of 35.3%.

Abang Johari was, however, previously quoted as saying that the 20% stake target is inaccurate.

Edited ByS Kanagaraju

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