Malaysia’s Affin Bank Weighs IPO of Asset Management Unit

Affin Bank Bhd. is considering an initial public offering of its asset management unit that could raise about 500 million ringgit ($123 million), people familiar with the matter said.

The Malaysian lender is working with advisers on the potential listing for Affin Hwang Asset Management Bhd. in Kuala Lumpur as soon as the second half of next year, the people said, asking not to be identified as the matter is private.

Deliberations are at an early stage, and there’s no certainty they will lead to a transaction, the people said. Representatives for Affin did not immediately respond to requests for comment.

Shares of Affin Bank rose as much as 3.1% on Thursday to their highest level in two weeks. Affin’s stock has fallen 13.7% in the year to date.

Affin Bank owns 63% of Affin Hwang Asset Management, according to its 2019 annual report. The investment manager also counts Japan’s Nikko Asset Management International Ltd. as a shareholder, the website of an affiliated unit shows.

Affin Hwang is Malaysia’s third largest money manager by assets, after Public Mutual Bhd. and Principal Asset Management Bhd., according to data compiled by Bloomberg. It manages over 60 billion ringgit worth of assets as of June 30, 2020, according to its official website.

A successful listing would help boost Malaysia’s first-time share sale market, which has raised $477 million in IPOs so far this year, already 4.5% above last year’s total. Private hospital operator Ramsay Sime Darby Health Care Sdn., credit reporting agency CTOS Holdings Sdn. as well as glove makers Harps Holdings Sdn. and Smart Glove Corp. are considering listing in Malaysia as early as next year.

Affin Hwang Asset Management contributed profit before tax of 84.2 million ringgit to Affin in the nine-month period ended Sept. 30, a 13.6% increase from 74.1 million ringgit the same period a year ago, according to Affin’s latest financial statement. The company attributed the increase mainly to higher fee and commission income, the statement showed.

©2020 Bloomberg L.P.

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