Thursday 28 Mar 2024
By
main news image

KUALA LUMPUR (June 16): Aeon Credit Service (M) Bhd said it will be "very cautious" this year as market conditions are “not very encouraging” following the implementation of the goods and services tax (GST) and the rise in cost of living, said its managing director Kenji Fujita.

The non-bank financial institution is expecting to maintain its overall growth revenue of 27%, and non-performing loan (NPL) ratio of 2.7%, in the current financial year ending Feb 28, 2016 (FY16), as per the group’s standing in FY15.

“We will keep up the quality of our assets comprising automotive, personal, and small and medium enterprise (SME) financing,” he told reporters after Aeon Credit’s annual general meeting today.

Though the difficult times can be viewed as an opportunity for a credit financing company, Fujita said the slowdown in the market also poses a risk because applicants would ask for short-term fundings for personal financing.

As such, he said this would require stringent scrutiny on the potential customer’s credit standing.

“Year-on-year, our non-performing loan ratio is increasing. With the GST and the rise in cost of living, they will impact the customers' ability to pay. Therefore, we need to improve our asset quality through stringent credit assessment, and be selective of customers," he said.

“The collection performance would also be monitored in a timely manner, and an action plan will be initiated when necessary,” Fujita added.

Meanwhile, Fujita said the group plans to increase its 1% share of the domestic automotive financing market by targeting the Japanese used-car segment here.

Auto financing was the main driver of the group's receivables for FY15, at RM1.08 billion.

“But we still see the potential to expand in this high-end market segment, which will support our asset growth,” he said.

For FY15, Aeon Credit (valuation: 2.1; fundamental: 1.1) posted a net profit of RM216 million, up 23% from the year before, on revenue of RM872 million.

Fujita said Aeon Credit will also enhance its SME financing scheme by tapping into the heavy industry and machinery sector, and liaising directly with the business owners.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

 

      Print
      Text Size
      Share