Thursday 28 Mar 2024
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KUALA LUMPUR (May 26): Affin Holdings Bhd's net profit grew 4.6% to RM123.2 million for the first quarter ended March 31, 2017 (1QFY17) from RM117.8 million in the previous year's corresponding quarter (1QFY16), backed by improved operating income, Islamic banking income and net interest income.

Revenue rose 19% to RM509.6 million from RM426.92 million.

In a statement today, the banking group said the total capital ratio, common equity tier-1 capital ratio and tier-1 capital ratio of all its banking entities remained healthy, well above the minimum requirements.

"Affin Bank Bhd (ABB) was a key contributor to Affin's overall results, achieving a pre-tax profit of RM125.3 million for the first quarter of 2017, compared to RM123.1 million in the previous year's corresponding quarter.

"The improved performance was primarily due to higher Islamic banking income, net interest income and other operating income," it said, adding that Affin Islamic Bank Bhd also delivered higher pre-tax profit of RM32.8 million for the quarter.

Affin Hwang Investment Bank Bhd registered a profit before tax and after zakat of RM40.7 million for 1QFY17, from RM24.3 million in 1QFY16, backed by improved market sentiment which had resulted in higher trading activities in the fixed income and equities markets.

Under the insurance segment, AXA Affin Life Insurance Bhd saw lower pre-tax loss of RM5.3 million, compared to a net loss of RM11.6 million a year earlier, due to higher investment income and lower reserves for future policyholders' liabilities.

Meanwhile, AXA Affin General Insurance Bhd saw lower pre-tax profit of RM15.5 million, compared to RM35.7 million in the previous year, due to lower underwriting as a result of higher claims and increase in expenses for transformation initiatives.

Going forward, Affin said its commercial banking business will focus on growing its fee-based income from digital banking, unit trust and credit card segments.

The group remains focused on its plan to expand its Islamic financing portfolio to meet its 40% contribution target by 2020.

It expects household and SME loans to be key drivers, expecting growth of 6% to 7%.

"Our asset quality remains strong and Affin is committed to maintaining our proactive measures of prudent underwriting standards, active recovery efforts and effective management of costs and resources.

"In line with this, we are also looking at increasing our level of deposits in order to strengthen our liquidity and funding profile," it said.

Its investment banking business is expected to benefit from improved market sentiment, banking on the expected improvement in economic activity in 2017.

Meanwhile, the group said it continues to seek new avenues to expand its life insurance business, focusing on the mass affluent market.

"Meanwhile, with motor and fire tariffs being implemented, the general insurance industry will inevitably be challenging. Nevertheless, strategies and measures have been put in place to prepare the company for the challenges ahead," said Affin.

Affin closed 4 sen or 1.38% lower at RM2.86, giving it a market capitalisation of RM5.56 billion.

 

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