Armed Forces Fund Board (LTAT) chief executive officer Mohammad Ashraf Md Radzi (first left), Defence Minister Datuk Seri Mohamed Khaled Nordin (third left), LTAT chairman Tan Sri Azizan Ariffin (right) and board members announcing on Thursday a 5% dividend for 2023. (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (April 4): The Armed Forces Fund Board, also known by its Malay acronym LTAT, on Thursday declared a 5% dividend for 2023, the same rate as 2022, with a slightly higher payout.

LTAT distributed a total of RM485.08 million, compared with RM476.45 million paid in 2022, to its depositors, said Defence Minister Datuk Seri Mohamed Khaled Nordin. The fund, which mainly manages the retirement savings of military members, distributed the dividends to 123,380 contributors on Thursday.

“We wouldn't announce dividends like this if we didn't have a strong and solid financial position,” the minister said at a press conference following the dividend announcement.

The comments came on the heels of concerns raised by the auditor general over the deficit in reserves in three years running up to 2022. LTAT's reserves were at a negative RM338 million in 2022, RM258 million in 2021, and RM376 million in 2020.

LTAT, which now manages assets totalling RM10.77 billion, reported that its net profit grew 24% to RM537.80 million for 2023, compared with RM432.47 million a year earlier. Retained earnings post dividend rose 52% to RM756.81 million, from RM498.65 million for the previous year.

Mohamed Khaled also said the dividend announcement underscores LTAT's robust financial standing. Overall combined reserves totalled RM450.3 million, more than double the amount of RM160.6 million in 2022, he noted.

LTAT also committed to keeping its book solvency ratio above 100% when announcing the annual dividend to contributors to safeguard its ability to consistently meet its financial obligations.

The fund declared its lowest-ever dividend of 2% for 2018 after its net profit halved. An investigative audit by Ernst & Young commissioned in 2019 revealed years of mismanagement and irregularities.

Since then, LTAT has put in place a five-year strategic plan, and managed to raise its dividend rates to 2.5% for 2019, 3.5% for 2020, and 4.1% for 2021.