Affin Holdings reorganisation gets go-ahead from BNM, MoF

By ALIFAH ZAINUDDIN

Affin Holdings Bhd has received approvals from the Ministry of Finance (MoF) and Bank Negara Malaysia (BNM) to proceed with its proposed reorganisation exercise.

The financial group controlled by the Armed Forces Fund Board, or better known as the Lembaga Tabung Angkatan Tentera (LTAT) aims to transfer Affins’ entire shareholding in Affin Hwang Investment Bank (IB) Bhd Affin Hwang IB, Affin Moneybrokers Sdn Bhd, Axa Affin Life Insurance Bhd and Axa Affin General Insurance Bhd to Affin Bank Bhd.

Group CEO Kamarul Ariffin Mohd Jamil said the proposed restructuring will enhance Affin’s synergy, allowing the group a way forward for its next phase of growth.

“In view of the changing dynamics of the economy and industry, it is critical that we put in place the right strategies centred on efficiency, adaptability and productivity to thrive and differentiate ourselves,” Kamarul noted in a statement last Friday.

Affin has also received approval from the Securities Commission Malaysia to change the ultimate share-holder of Affin Hwang IB, Affin Hwang Asset Management Bhd and AIIMAN Asset Management Sdn Bhd.

The group added that it is now working to obtain the other necessary regulatory approvals to proceed with the proposed reorganisation.

Following talks of a merger between RHB Bank Bhd and AMMB Holdings Bhd, rumours of further mergers and acquisitions (M&A) within the banking sector included Affin Bank—who was seen as a prime target for M&A activities due to its small size.

Kamarul has since denied the speculation, stating it was “healthy” to have banks of various sizes in the market.

Affin Bank’s second-largest shareholder is Hong Kong- listed Bank of East Asia Ltd. Affin Bank is expected to expand its branches nationwide from its current 108 branches.

The bank is aiming a loan growth of between 8% and 10% this year, while its Islamic banking arm expects a loan growth of 15%.

For the first-quarter ended March 30, 2017, Affin posted a 4.6% year-on-year (YoY) increase in net profit to RM123.2 million, driven by higher operating income, Islamic banking income and net interest income totalling RM82.7 million. Turnover for the quarter rose 19% YoY to RM509.6 million.

Moving forward, Affin noted its commercial banking business will focus on growing its fee-based income from digital banking, unit trust and credit card segments.

It plans to develop its Islamic financing portfolio to meet its 40% contribution target by 2020.

Affin shares fell two sen or 0.76% to close at RM2.60 last Friday giving it a market capitalisation of RM5.05 billion.