by ASILA JALIL/ pic by BLOOMBERG
AFFIN Bank Bhd’s net profit fell 56.8% to RM67.4 million in its second quarter ended June 30, 2020 (2Q20), from RM156.03 million recorded a year ago, dragged mainly by the recognition of modification loss of RM79.9 million.
“The modification loss was incurred arising from the waiving of interest charges during the six-month loan and financing moratorium for hire purchase and personal financing,” the group said in a statement yesterday.
Revenue, however, increased 3% to RM512.96 million in the current quarter versus RM497.93 million in the previous corresponding quarter.
For the six months ended June 30, 2020 (1H20), the bank’s net interest income slipped by 11.9% or RM44.7 million, in line with the reduction in gross loans, advances and financing by RM2.6 billion and financial investments at fair value through other comprehensive income by RM2 billion, as well as the Overnight Policy Rate cuts during the period under review.
In the 1H20, total loans, advances and financing shrunk by 2% to RM45 billion mainly due to rebalancing of portfolios.
Gross impaired loans ratio decreased to 3.06% from 3.49% registered at end-June 2019.
Islamic banking income rose 17.3% to RM34.9 million in 1H20 due to net gain on financial instruments.
Non-interest income for the group jumped 66.8% to RM655.4 million for the period, helped by higher net gains on financial instruments, net fee and commission income, and other incomes.
“The higher net fee and commission income was contributed by the asset management and stockbroking businesses,” Affin Bank said.
Operating expenses increased by RM99.7 million or 16.2% due to a rise in personnel costs linked to trading performance.
The group remains the highest capitalised bank in Malaysia with a total capital ratio of 23.5%, and has launched its own Financial Assistance and Instalment Relief programme, or FAIR, for its customers.