KUCHING: The possibility of the Sarawak government taking over a commercial bank in the country will help to boost the business sector and entrepreneurship in the state, according to Professor of Economics, Geoffrey Williams, from the Malaysia University of Science and Technology.
Williams noted that such a move could lead to the bank’s management offering more favourable terms and superior products compared to competitors for Sarawak businesses.
This may include improved loan terms, cost-effective loans, enhanced financial products, and advanced e-commerce and e-payment options.
“If the bank is purely local to Sarawak, it might rely too heavily on the Sarawak government for support. However, if it is a nationwide or regional bank, it could leverage a wider market for long-term growth as a financial institution.”
Speaking to New Sarawak Tribune, the economist also opined that acquiring a small Peninsular bank could rescue an underperforming bank, allowing investors to monetise their investment and move forward.
Government-linked investment companies (GLIC), for example, might be willing to divest an underperforming asset to the Sarawak government, he added.
Williams highlighted the broader context of economic and financial reforms initiated under Premier Datuk Patinggi Tan Sri Abang Johari Tun Openg, including the Sarawak Sovereign Wealth Fund, the acquisition of Bintulu Port and MASWings, and the announcement of free tertiary education from 2026.
He expressed confidence that these significant socioeconomic and development reforms would substantially enhance the quality of life for Sarawakians.
Abang Johari on Wednesday (Jan 17) acknowledged the possibility of the state government taking over a commercial bank but refrained from providing details regarding a media report on increasing shareholding in Affin Bank Bhd.
Addressing the media, Abang Johari stated, “I don’t dare comment as Affin Bank is a listed company.”
According to a filing with Bursa Malaysia on Jan 8, Affin Bank said the company’s major shareholder, the Armed Forces Fund Board (LTAT), had informed that it was in discussions with the Sarawak State Financial Secretary for possible transaction of additional shares in the bank.
The Sarawak State Financial Secretary currently owns a 4.796 per cent equity interest in Affin Bank as of Dec 29, 2023.
In response to reports signaling the state government’s intent to take over a third entity, Abang Johari remarked, “As people say, there is no wind, the flag won’t be fluttering.”
Last Friday, he indicated that an announcement about the takeover, one of three major entities to be wholly owned by the state this year, would be made in a month or two.
