Sarawak set to increase its stake in Affin Bank

KUALA LUMPUR: Sarawak’s decision to increase its stake in Affin Bank Bhd is part of the state’s strategy for economic development, said Sarawak Premier Tan Sri Abang Johari Tun Openg.

“Now we feel like we need a bank in order to boost our small and medium-sized enterprises (SME) and also business activities in Sarawak. And since we have certain capital, because we have savings ... we look at the bank as part of investment. The way you run the bank ... will boost capital outlay. That’s why we are interested to look at banks,” he told reporters at “Malaysia Market Outlook 2024 – Propelling Malaysia Forward” at Menara Affin, Tun Razak Exchange today.

Abang Johari confirmed that the Sarawak state government is close to concluding discussions with the Armed Forces Fund Board (LTAT) to buy its stake in Affin Bank.

“Definitely we are looking at Affin. More or less we are conclusive in terms of our discussions with LTAT,” he said.

In the past, Abang Johari said, as many as six banks originated from Sarawak, such as Bank Utama and Wah Tat Bank.

“When there was a policy to merge all these banks (post Asian Financial Crisis), our banks were all swallowed by the big banks,” he said when asked why Sarawak is interested in banks.

Currently, Sarawak holds a 4.796% stake in Affin Bank, acquired in April 2023 for RM1.97 per share or RM221.74 million.

Meanwhile, LTAT has a direct 29.7% stake in the banking group while its wholly owned unit Boustead Holdings Bhd has a 20.65% stake.

On the Sarawak Sovereign Wealth Future Fund, Abang Johari commented, “The revenue that Sarawak has, we must keep. Our reserves ... boleh tahan juga (quite good/not bad). So what we do, we want to place our reserves somewhere for the future generations.

“We have set aside RM8 billion as seed capital. And we will be contributing every year to this force saving. And we don’t touch them ... that money ... for the next 20 years. Even whoever takes over the government also can’t touch that money by law,” he said.

Abang Johari also spoke on Sarawak’s green energy initiatives and stated that it has sold its power to Kalimantan Barat in Indonesia. He said the state is open to collaborating with other countries’ renewable energy and is considering exporting green power to Singapore.

“We are still building our power. And Singapore needs green energy. So based on the spirit of Asean, we think that if we have access to green energy, why not we help Singapore ... and then in return, Singapore also must help us to bring in investment,” he said.