KUALA LUMPUR (March 7): Defence Minister Datuk Seri Mohamed Khaled Nordin said the Armed Forces Fund Board (LTAT) intends to continue holding a 'significant' stake in Affin Bank Bhd, with the expectation of benefitting from potential value increases brought by new investors.
In a parliamentary written reply to Datuk Seri Ikmal Hisham Abdul Aziz (PN-Tanah Merah), Khaled said that the proposed disposal of LTAT's stake in Affin Bank is a reasonable and strategic investment decision aimed at generating competitive and sustainable dividend returns for contributors.
This move, Khaled said, was part of LTAT’s effort to rebalance its investment portfolio in alignment with the targets set in the LTAT Strategic Asset Allocation Framework (SAA).
“Currently, LTAT holds an effective stake of 48.7% in Affin Bank.
“Proposed partial release of interest to stakeholders who have strong financial ability will give added value higher to the bank in the form of business growth and increased profitability for the long term,” added Khaled.
Under the current listing ruling, a substantial shareholder is defined as one who has an interest (or interests) in the voting shares in the corporation that is not less than 5%.
Currently, LTAT is the largest shareholder in Affin Bank, holding a 28.78% stake, while its wholly-owned unit Boustead Holdings Bhd holds an additional 20.02%.
As a military pension fund, Khaled emphasised that LTAT prioritises asset diversification and manages investments for fund stability and continuous returns.
Without giving details, Khaled said that any shareholding transfer in future is subject to the approval of regulatory bodies, including Bank Negara Malaysia (BNM), as a compliance measure for LTAT's corporate governance.
On Jan 31, The Edge reported that the Sarawak state government plans to increase its stake in Affin Bank through its investment arm, State Financial Secretary Sarawak, to approximately 30%, up from the current 4.8%.
This move would surpass LTAT, making the state government the largest shareholder in the banking group.
To achieve this, according to a source, Sarawak aims to acquire the entire 20.02% stake held by Boustead Holdings, as well as a portion of LTAT's stake.
February reports brought attention to comments by Sarawak Premier Tan Sri Abang Johari Openg, in which he stated that the state government is nearing the end of negotiations with LTAT. However, he refrained from further commentary given that Affin Bank is a publicly listed company.
Simultaneously, Bank of East Asia Ltd (BEA), based in Hong Kong and holding a 23.93% equity interest in Affin, was reportedly to have attracted interest from parties affiliated with the state.
This interest aims to provide Sarawak with a degree of control over the banking group.
As per the Financial Services Act 2013, any party seeking to acquire multiples of 5% stakes in a bank requires approval from Bank Negara.
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