Affin Bank Actively Seeking M&A Opportunities
Affin Bank Bhd, now backed by Sarawak as its largest shareholder, is looking to expand and grow through potential acquisitions. The bank, though one of the smaller banking groups in the country, is eager to seize opportunities for growth. This could mean acquiring businesses in areas like insurance, takaful, or asset management, as well as considering mergers with other banks.
According to sources familiar with the bank’s plans, Affin is preparing to ramp up its operations. However, Affin’s president and group CEO, Datuk Wan Razly Abdullah Wan Ali, was not available for immediate comment on these developments.
In a significant move back in July 2022, Affin had sold its majority stake in Affin Hwang Asset Management Bhd to CVC Capital Partners for RM1.42 billion. This decision came at a time when Affin required additional capital to support its expansion in Islamic banking.
Moreover, Sarawak recently increased its interest in Affin to 31.25% by completing a share transfer. This move involved the Armed Forces Fund Board (LTAT) and Boustead Holdings Bhd divesting a sizable portion of their stake to Sarawak’s SG Assetfin Holdings Sdn Bhd, a special-purpose vehicle wholly owned by the State Financial Secretary Sarawak. As a result, LTAT’s stake in Affin decreased to 22.01%, and Boustead is no longer a shareholder.
Looking ahead, it is expected that Sarawak will secure board representation in Affin. Sources suggest that the state aims to have two board seats, allowing for closer involvement in the bank’s decision-making processes.
By depositing around RM1 billion in Affin, Sarawak aims to strengthen the bank’s current account and savings account (CASA) balances. This strategic move is anticipated to help stabilize Affin’s net interest margin (NIM) and overall financial position.
To adapt to changing market conditions, Affin Bank recently introduced an early retirement scheme for employees over 50 years old. This initiative, designed to enhance productivity and reduce costs, may lead to a staff reduction of approximately 200 employees in the initial phase of the program.
Despite adjusting some of its financial projections for the year, Affin Bank reported a strong net profit in the third quarter, signaling positive momentum. Analysts have varied views on the stock, with one “buy” rating, four “hold” ratings, and six “sell” ratings. With Sarawak’s increased involvement, the bank’s medium-term outlook appears promising, especially in terms of liquidity and revenue generation opportunities.
