Pension fund assures members that it only extends loans to corporations with ‘AA’ ratings.
KUALA LUMPUR: Employees Provident Fund (EPF) members have been told not to worry about the RM219.3 billion loans the EPF has extended to corporations and government agencies.
These are being well serviced and none are in default, CEO Shahril Ridza Ridzuan has assured.
Recently some expressed concern over the EPF extending loans to government agencies, especially after it was revealed that the EPF had loaned money to Felda Global Ventures Holdings Bhd’s whose performance has been questioned.
“If you look at our exposure to the government and government credit, it is roughly 30% of our AUM (assets under management ), that is a mixture of MGS (Malaysian government securities), GIIs (government investment issues), government guaranteed papers, loans to government and government agencies, none of that has gone into default.
“We’re very comfortable with our exposure,” The Sun quoted Shahril as saying.
EPF had total AUM of RM731.1 billion at the end of December 2016.
Shahril said the EPF would only extend loans to corporations with “AA” ratings.
However, he declined to reveal the quantum of loans which were guaranteed by the government and those not guaranteed.
Earlier, the EPF had confirmed that the RM6.5 billion loan taken by Felda Global Ventures Holdings Bhd’s (FGV) holding company Felda Holdings Bhd was not in default and that it continued to service the loan.
Meanwhile, commenting on the EPF’s investment losses in (FGV), Shahril was quoted as saying, “We’ve been selling down FGV for a very long time, and we’ve been trading the stock as well. When it was low, we bought back in and sold later. If you look at 2016, there was hardly any impairment for FGV.”
The EPF was reported to have lost about RM575.8 million from divesting its shares in FGV. It ceased to be the plantation giant’s shareholder in December 2016, according to the report.