Affin Bank’s 4Q19 earnings down 15%, proposes 7 sen dividend


AFFIN Bank Bhd’s net profit for its fourth quarter ended Dec 31, 2019 (4Q19), fell 15% to RM122.11 million versus RM143.75 million the year before, as the commercial banking segment recorded lower net interest income (NII) and other income.

Revenue rose 7.4% year-on-year (YoY) to RM487.05 million from RM453.56 million previously, the group said in a statement to the local bourse yesterday.

For the financial year ended Dec 31, 2019 (FY19), the group’s net profit slipped 3.1% to RM487.77 million from RM503.09 million the year prior, whereas revenue increased 0.6% YoY to RM1.93 billion from RM1.92 billion previously.

NII skidded 12.1% to RM743.12 million in FY19 from RM845.4 million previously, in line with the reduction in loans, advances and financing portfolio and financial investments at fair value through other comprehensive income of RM3 billion and RM2.9 billion respectively.

Meanwhile, income from the Islamic banking business climbed 3.1% YoY to RM410.68 million.

The group’s commercial banking arm, Affin Islamic Bank Bhd, registered a lower profit before tax (PBT), noting an increase in net gain on financial instruments which was not sufficient to cushion lower net finance income, higher overhead expenses and allowance for credit impairment losses.

Affin Hwang Investment Bank Bhd, its investment banking arm, also reported a higher PBT for the year, whereby the increase in net gain on financial instruments was partially offset by reduction in net fee and commission income.

Overall operating expenses (opex) increased 0.5% due to the rise in personnel costs, whereas the cost-to-income ratio improved slightly to 63.6% from 63.39% in the previous financial year.

Total loans, advances and financing shrunk 6.1% to RM46 billion due to rebalancing of portfolios, while the group’s gross impaired loan ratio improved to 3% from 3.25% as of quarter end.

Customer deposits also fell 10.9% to RM51.1 billion as at end-2019 against the previous year.

Liquidity coverage ratio for the group also improved to 171.7% from 169.3%, while its net stable funding ratio also improved to 115.6% from 86.9%, meeting the central bank’s guidelines on liquidity requirements.

The common equity Tier 1 and total capital Tier 1 ratios of all the banking entities in the group remained above the regulatory requirements, whereas the capital ratios were 14.44%, 16.22% and 23.24% respectively.

A final dividend of seven sen in respect of the financial year has been proposed by the board, subject to shareholder approval at the group’s upcoming AGM.