KUALA LUMPUR: Affin Holdings Bhd saw its net profit for the third quarter of financial year 2014 ending December (3QFY14) decline 16.6% to RM144.3 million from RM172.97 million a year ago. This is due to increased overhead expenses, allowance for loan impairment and finance cost, as well as a reduction in loan recovery.

Revenue, however, expanded 22.65% to RM937.17 million from RM764.04 million in 3QFY13. Earnings per share (EPS) shrank to 7.36 sen from 11.57 sen a year ago.

Affin also declared an interim dividend of 15 sen per share for FY14, payable on Dec 30.

For the nine-month period of FY14 (9MFY14), Affin’s net profit was down 16.8% to RM402.1 million from RM483.11 million, while revenue climbed 13% to RM2.6 billion from RM2.3 billion in 9MFY13. EPS for 9MFY14 was 24.18 sen compared with 32.32 sen.

“For 9MFY14, the other operating income, net interest income and Islamic banking income were higher by RM177 million, RM13.9 million and RM11.3 million respectively.

“However, these were not sufficient to offset the increase in overhead expenses, allowance for loan impairment and finance cost of RM217.7 million, RM59 million and RM19 million respectively, as well as the reduction in loan recovery of RM11.4 million,” it said in a filing with Bursa Malaysia yesterday.

Affin said its annualised after tax return on equity and after tax return on assets were 7.3% and 0.9% respectively for 9MFY14.

Going forward, Affin said all its business segments will leverage synergistic growth to boost the group’s position as a major player in the nation as well as the region, in line with the group’s aim of providing dedicated one stop financial solutions to a wide spectrum of clients.

“The commercial banking segment is optimistic that it will be able to maintain its earnings momentum for the rest of 2014 with a focus on small and medium enterprises and contract financing as well as exploring untapped avenues in the retail market while also leveraging synergies within Lembaga Tabung Angkatan Tentera and Boustead Group,” it said, adding that the insurance segment is expected to register moderate growth in an increasingly challenging and competitive environment.

This article first appeared in The Edge Financial Daily, on November 25, 2014.