KUALA LUMPUR (Sept 23): After a long wait, Sarawak will finally formalise a deal on Friday to raise its stake in Affin Bank Bhd (KL:AFFIN) to around 30%.
The state will ink a sale and purchase agreement with two of Affin Bank’s shareholders — Lembaga Tabung Angkatan Tentera (LTAT) and Boustead Holdings Bhd — in Kuching on that day, according to a media invitation to the event.
LTAT currently has a 28.88% stake in Affin Bank, while Boustead, which is wholly owned by LTAT, owns about 20%.
Sarawak is to acquire Boustead’s entire 20% stake in Affin Bank, as well as part of LTAT’s, thus enabling it to overtake LTAT as the lender’s largest shareholder with a stake of around 30%, The Edge reported back in Jan 31, citing sources.
Sarawak currently holds just a 4.8% stake in Affin Bank.
Affin Bank’s second-largest shareholder is Hong Kong-based lender Bank of East Asia Ltd, which holds a 23.93% stake.
The stock jumped on Monday after Sarawak Premier Tan Sri Abang Johari Tun Openg told reporters in the state on Saturday that he expected to formally announce the state’s acquisition of the Affin Bank stake “within a week”. He said the deal had been sorted out, including matters with Bank Negara Malaysia (BNM).
The stock rose 4.5% to close at RM3 on Monday, with a market capitalisation of about RM7.2 billion.
In an exclusive interview with The Edge in Kuala Lumpur on July 19, Abang Johari revealed that the state had been given conditional approval by BNM for the deal on June 12, and that there were certain “minor” technicalities that it needed to furnish to the central bank.
“There’s some technical regulatory process that has to be completed, which shall soon be completed,” he said without eleborating.
At the time, he expected the deal to be finalised within a month, but it turned out to be longer than expected.
On the price, he said: “We negotiated [with LTAT] on a willing buyer, willing seller [basis]. That one is already finalised.”
Sarawak, via the State Financial Secretary Sarawak, bought its current stake in Affin Bank in April 2023 for RM1.97 per share or RM221.74 million in total.
At a press conference earlier this year, when asked why Sarawak, unlike other states, was keen on owning a stake in a bank, Abang Johari recounted how as many as six banks had originated from Sarawak in the past, including Bank Utama and Wah Tat Bank.
“When there was a policy [by the federal government] to merge all these banks [post Asian Financial Crisis], our banks were all swallowed by the big banks — if I can use the word ‘swallowed’. We feel like we need a bank in order to boost our small and medium enterprises, and also business activities in Sarawak,” he said.