KUALA LUMPUR: Lembaga Tabung Haji (TH) aims to provide stable profit distributions to its depositors in line with its mandate to manage the funds of Muslims planning to fulfil their hajj obligation.
Group managing director and chief executive officer Datuk Nik Mohd Hasyudeen Yusoff said a more sustainable distribution rate is crucial for TH because pilgrims will need to wait for their turn for hajj due to the quota set by the Saudi Arabia government.
"We have to ensure that TH continues to operate for more than a century to allow our pilgrims to complete their religion.
"This means the safety of our investments is paramount and TH cannot afford to take on investments that are too risky," said Nik Mohd.
TH will continue to work hard and explore investment opportunities in search of higher returns despite the challenging market conditions.
"TH achieved better profits mainly due to its improved performance, stronger financial position and a more efficient cost management.
"The profit distribution for 2020 was also more competitive compared with returns from fixed deposits in Islamic banks," he said.
TH recorded an improved financial performance (unaudited) for 2020 with net profit after zakat rising 22 per cent or RM397 million to RM2.23 billion compared with 2019.
TH said the performance was supported by its fixed income investments that generated RM1.90 billion in income, equity investments with income of RM430 million, property investments with RM352 million and Islamic money market instruments contributing RM318 million in income.
"TH also remains committed to protecting the interests of depositors with more than half of its asset allocation (51 per cent) invested in sukuk offering fixed and recurring income.
"This is in line with its strategic asset allocation (SAA) which emphasizes long term investments providing safe and recurring income with tolerable risk levels," it said.
Looking ahead in 2021, TH expects a more challenging operating environment where investors will be pressured to look for higher returns amid a soft economy.
However, TH said the efforts by various countries, including Malaysia, to ensure their population are vaccinated against Covid-19 should support the continuing initiatives towards economic recovery.
"We will continue our efforts to rebalance the investment portfolio especially in replacing low-yielding assets with those that can provide better returns to depositors.
"This includes providing more focus on overseas investments and ESG- based (environmental, social and governance) investments," it added.