KUALA LUMPUR: The proposed sale of part of the Armed Forces Fund Board's (LTAT) interest in Affin Bank is to rebalance the former's investment portfolio based on the targets set in the Strategic Asset Allocation Framework (LTAT), according to the Defence Ministry.
The ministry opines the proposal as a reasonable action and an investment decision that provides positive returns in the form of competitive and sustainable dividends to contributors.
LTAT currently holds an effective interest of 48.7 per cent in Affin Bank.
"The proposed release of part of the interest is targeted at stakeholders with strong financial capabilities and will provide higher added value to the bank in the form of business growth and increased profits for a long-term period," according to the ministry in a written answer published on the Parliament's website.
It was in response to a question from Datuk Seri Ikmal Hisham Abdul Aziz (PN-Tanah Merah) who wanted to know the rationale for LTAT's plan to sell its stakes in Affin Bank Berhad, which is an investment entity under LTAT that managed to record profits every year.
According to the Defence Ministry, LTAT will remain a significant shareholder in Affin Bank if the sale is finalised.
It also said that as a retirement fund, LTAT should prioritise asset diversification and manage its investments by prioritising fund stability and continued returns.
"Any proposed shareholding transfer is subject to the approval of regulatory bodies including Bank Negara Malaysia as a compliance measure to its corporate governance," stated the ministry.
– BERNAMA