Tabung Haji dividend at an all-time low of 1.25 per cent

Last Friday, Tabung Haji announced its 2018 hibah (dividend), which is at 1.25%. A total pay-out of RM 913 million will be given to its depositors. Reports indicate that the 1.25% dividend is the lowest rate ever recorded in Tabung Haji’s history.

Minister in the Prime Minister’s Department (Islamic Religious Affairs) Datuk Seri Mujahid Yusof Rawa said the reason was due to mismanagement of the previous administration (BN), giving out high dividends despite the inability to pay their investors.

Last December, special purpose vehicle (SPV) known as Urusharta Jemaah Sdn Bhd (UJSB), an incorporated company that develop projects to rehabilitate underperforming assets, was set up under the Ministry of Finance to take over Tabung Haji’s underperforming properties, worth RM19.9 billion.

When questioned about the federal government’s plan to rescue the Malaysian hajj fund board, Mujahid said RM500 million will be allocated to the fund by 2020. Subsequently, RM1.73 billion will be given annually until all sukuk is redeemed, which would total up to RM 17.8 billion in 10 years.

According to Tabung Haji Managing Director and CEO Datuk Seri Zukri Samat, for Tabung Haji to have a hibah pay-out, it needs to satisfy two conditions: being profitable and the assets have to be more than liabilities. In this case, the assets are only RM1 billion more than liabilities, therefore that is their maximum pay-out, and hence the low dividend rate.

As a comparison, reports indicate that Tabung Haji had total assets of RM76.5 billion in 2018, with RM75.5 billion liabilities. Whereas in 2017, the total assets were RM70.3 billion, with total liabilities amounting to RM74.4 billion.

Despite receiving backlash on the 1.25% dividend, Zukri reminded the public that Tabung Haji priorities have not changed and will do their best to assist the country’s pilgrims in performing the hajj. He attributes the federal government’s support to turn things around and restore the balance sheet.