Affin gets nod for asset management unit sale

Affin Bank president and chief executive officer Datuk Wan Razly Abdullah Wan Ali said the divestment of AHAM will result in a RM1.06bil gain and the proceeds have been earmarked for special dividends and to reinvest into its core banking business.

PETALING JAYA: Affin Bank Bhd plans to dish out a special dividend to its shareholders upon the completion of the proposed divestment of Affin Hwang Asset Management Bhd (AHAM).

The bank received the green light from its shareholders yesterday to proceed with the disposal of its 63% stake in AHAM by Affin Hwang Investment Bank Bhd to Starlight Asset Sdn Bhd for RM1.42bil.

Affin Bank president and chief executive officer Datuk Wan Razly Abdullah Wan Ali said the divestment of AHAM will result in a RM1.06bil gain and the proceeds have been earmarked for special dividends and to reinvest into its core banking business.

“We do have the intention to reward shareholders for their support. We needed shareholders’ approval for the divestment.

“After that, we will have to go to the Securities Commission for approval and then we need to complete the deal,” he said after the bank’s AGM.

Affin Bank to pay special dividend to shareholders

He added that the proposal is expected to be wrapped up by the end of the third quarter.

“Once that deal is completed, we need to submit an application to Bank Negara,” he said in regard to the special dividend.

However, Wan Razly could not comment on the quantum of the special dividend as the group needs to allocate capital for its future growth plans.

He said the proceeds would also support the group’s common equity tier-one ratio for an additional 2.89% to about 16%.

Wan Razly said the disposal of AHAM would unlock the value of the bank’s investment in the entity at an attractive premium as it is selling at the top end of the valuation range.

“I think we are still quite far away from any mergers and acquisitions,” he said, adding that the focus will be on strengthening its core banking business.

The bank announced an annual dividend of 12.5 sen per share, equivalent to a total payout of RM265.5mil, the highest in seven years.

The dividend payout ratio amounted to 50.39%.

It said the dividend was declared following its pre-tax profit of RM703.9mil for the financial year ended Dec 31, 2021, an 82% increase compared with RM386.7mil in the previous financial year.

“The final dividend paid will be via a dividend reinvestment plan where shareholders can either elect to invest in new Affin Bank shares or receive cash,” the bank said in a statement.