AEON Credit to go cashless, digital

The shift to cashless transactions will allow the company to improve efficiency in its operations through cost control measures

By ASILA JALIL / Pic TMR

AEON Credit Service Bhd plans to promote cashless transactions and digitalise its operations to ensure the company remains sustainable as it moves forward.

Its credit MD Yuro Kisaka said the shift to cashless transactions will allow the company to improve efficiency in its operations through cost control measures as it continues to bear the impact of the Covid-19 pandemic.

“While we remain cautious on the economic outlook of the country, we are stepping up on the key projects which will ensure the future sustainability of the company.

“A key area that we are focusing on is digitalisation and therefore, enhancing customer experience through touchpoints will make the application process fast and efficient,” he said in a statement yesterday.

Its cashless transactions will enhance features of the AEON e-wallet by integrating the group’s database to optimise the potential of data analytics in its product offerings and cross-selling.

AEON Credit’s net profit for the third quarter ended Nov 30, 2020, fell 39.7% year-on-year (YoY) to RM42.15 million from RM69.93 million on higher impairment losses.

Its revenue marginally declined by 0.2% YoY to RM401.47 million from RM402.46 million, partly attributed to an increase in operating expenses. Total transaction and financing volume in the current quarter came in at RM1.22 billion.

Gross financing receivable increased by 1.9% to RM10.22 billion compared to RM10.03 billion, while non-performing loan ratio stood at 2.89% versus 1.93% as at Nov 30, 2019.

For the nine-month period, the group’s net profit declined 41% to RM120.24 million from RM203.66 million a year ago, while revenue dropped by 2.5% to RM1.16 billion from RM1.19 billion.

The lower turnover was mainly attributable to interest income decrease, resulting from the day-one net modification loss related to AEON Relief Programme and lower fee income in line with weaker transaction and financing volume for the financial period to date of RM2.97 billion.

The company’s pretax profit fell 37.1% YoY to RM171.28 million against RM272.41 million, dragged by lower fee income of

RM30.26 million and increased impairment losses on financing receivables of RM80.79 million due to the effects of the Covid-19 pandemic.

The decrease in profit before tax, however, was mitigated by lower other operating expenses which registered RM51.99 million.

Kisaka added that the company managed to recover in sales and business performance despite the challenges amid the pandemic and it will continue to strive in enhancing business sustainability via investments in IT.

He also said the company is on its way to recovery.

“We will monitor and assess the inherent credit risk in our financing portfolio by enhancing asset quality, prudent cost and cash management, while improving on financials,” he said.