THE reorganisation of Affin Holdings Bhd (AHB) under Affin Bank Bhd will draw synergistic benefits for shareholders, says Armed Forces Fund Board (LTAT), which owns the largest stake, or 35.42 per cent, in AHB.
LTAT chief executive Tan Sri Lodin Wok Kamaruddin believes the reorganisation would provide AHB better efficiency and cost-effectiveness.
He said the exercise was expected to be completed by October or November this year as it would involve the listing transfer of AHB to Affin Bank.
“Upon getting all the necessary approval, including that of Bursa Malaysia, Affin Bank would take over the listing status of AHB to become the holding company for Affin’s financial services group,” he told NST Business in a telephone interview yesterday.
Lodin said Affin’s banking group was moving in the right direction on the back of a good and strong management team.
“Although the growth from the reorganisation will not reach double-digit yet, but it is going at a very respectable pace... We are pleased with the performance so far and there is still room for improvement.
“We believe under the new structure and management team, the group will be able to unlock more value for shareholders and give better returns,” he said, adding that the reorganisation would benefit from having Affin Bank’s stronger resources.
Lodin also said the banking group’s capital would be further strengthened by the corporate exercise.
Affin Bank managing director and chief executive office Kamarul Ariffin Mohd Jamil concurred with Lodin.
The corporate exercise will see an exchange of AHB shares with those of Affin Bank on a one-to-one basis.
While the restructuring would save money, Kamarul Ariffin said: “More importantly, the impact, in terms of overall group synergy, would allow the entire Affin group to operate essentially under one. Thus, we can have much better synergy from this reorganisation,” he said.
Kamarul Ariffin pointed out there would be a marginal improvement of about 50-basis points, or 0.5 per cent, in the overall group capital.
“The AHB subsidiaries will become the subsidiaries of Affin Bank, allowing them to operate much closer under one group,” he added.
Kamarul Ariffin also said the reorganisation was aimed at improving the capital position of the bank.
“It is not so much for any future acquisitions or dividend payouts. Of course, once you have a much- better capital position, then the likelihood for dividend payout would be a lot better,” he added.