Affin Holdings aiming to focus on transformation plan to boost earnings


Affin Holdings Bhd noted its banking arm, Affin Bank Bhd, is targeting a loan growth of 6% to 7% by the end of 2017 as the group continues with its push to improve its efficiencies, adaptability, as well as productivity.

“The bank is expecting stronger loan momentum in the second half of 2017 from consumer, corporate, and small and medium enterprise segments.

The bank has a stable growth in the consumer segment and is on track in reducing its impaired loan to a level of 1.6% to 1.7% by year-end,” Affin Holdings said in the statement last week.

This is supported by the implementation of “Priority Islamic” approach to expand the Islamic banking segment.

Priority is also placed on increasing deposits to further strengthen the bank’s liquidity and funding profile.

The commercial bank remains optimistic for the year 2017 and will continue to support Affin group’s strategic vision in providing excellent banking services to meet its customer needs and expectations.

This comes as Affin Holdings net profit eased by 48% year-on-year (YoY) to RM73.26 million, or 3.77 sen earnings per share for the third quarter ended Sept 30, 2017 (3Q17), on higher overhead expenses of RM47.6 million attributable to the provision for its voluntary separation scheme, as well as lower other operating income attributable to the non-recurring gain on redemption of held-to-maturity securities of RM39.8 million in the preceding quarter.

Third-quarter revenue increased by 8% YoY to RM546.66 million. In an exchange filing last Thursday, Affin Holdings noted that an increase in other operating income, Islamic banking income and net interest income totalling RM236.5 million, and the reduction in allowance for securities impairment of RM17.7 million were not sufficient to cushion the increase in both overhead expenses and allowance for loan impairment of RM232.3 million and RM66 million respectively.

In addition, the share of profits in its associate was lower by RM9.8 million for the period under review.

As for its investment banking unit, Affin Hwang Investment Bank Bhd will continue to build resilience across its business and drive efficiency savings in all its business operations, with collaborative efforts within the group to increase its ability to offer a wider range of products and services to its enlarged clientele.

The group’s insurance business future strategy, under AXA Affin General Insurance Bhd, is to consolidate its operations by focusing on selective growth (diversification) and efficiency projects, to enhance the level of profitability, and invest in transformation projects to prepare the company for future industry challenges.

For the cumulative nine months, Affin Holdings posted a net profit of RM341.8 million, or earning per share of 17.59 sen, on the back of RM1.64 billion in revenue.