1. INTRODUCTION

The Board of Directors of Affin Bank Berhad ("ABB") is pleased to announce that Affin Islamic Bank Berhad ("AFFIN ISLAMIC"), a wholly-owned subsidiary of ABB, has on 11 January 2023 entered into a bancatakaful service arrangement (“BSA”) with Syarikat Takaful Malaysia Keluarga Berhad ("Takaful Malaysia Keluarga") and Syarikat Takaful Malaysia Am Berhad ("Takaful Malaysia Am"), a wholly owned subsidiary of Takaful Malaysia Keluarga, for a period of 5 years, commencing on 1 January 2023, with an option for AFFIN ISLAMIC to renew for another 5 years.

Pursuant to the BSA, AFFIN ISLAMIC shall distribute, market and promote credit-related, advisory and other family takaful products of Takaful Malaysia Keluarga and general takaful products of Takaful Malaysia Am.

2. RATIONALE FOR THE BANCATAKAFUL ARRANGEMENT

The bancatakaful arrangement will enhance AFFIN ISLAMIC’s value proposition to its customers in providing innovative takaful protection solutions, in partnership with Takaful Malaysia Keluarga and Takaful Malaysia Am, one of the leading takaful providers in Malaysia.

In addition to maintaining and expanding the current core business of credit-related family and general takaful products, Takaful Malaysia Keluarga will closely work with AFFIN ISLAMIC to implement various strategies to develop the advisory family takaful business and invest in its distribution capabilities. This in turn, will give AFFIN ISLAMIC’s customers better choice of innovative and competitively priced products and services. Further, the partnership is expected to further grow AFFIN ISLAMIC’s fee-based income.

3. EFFECTS OF THE BANCATAKAFUL ARRANGEMENT

The bancatakaful arrangement is not expected to have a material effect on the earnings and earnings per share of the ABB group of companies ("ABB Group") but is expected to contribute positively to the future earnings of ABB Group as the Bancatakaful business grows.

The bancatakaful arrangement will not have any material effect on the share capital and shareholdings of the substantial shareholders of ABB, or the net asset per share and gearing of ABB Group.

4. APPROVALS REQUIRED

The bancatakaful arrangement is not subject to the approval of any authorities and/or shareholders.

5. DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTERESTS

None of the Directors or major shareholders of ABB and persons connected with them have any interest, direct or indirect, in the bancatakaful arrangement.

6. STATEMENT BY BOARD OF DIRECTORS

The Board of Directors of ABB is of the opinion that this bancatakaful arrangement is in the best interest of ABB Group.

A copy of the press release in relation to the above is attached.

This announcement is dated 11 January 2023.