KUALA LUMPUR: Affin Holdings Bhd posted a net profit of RM208.6 million in its fourth quarter ended Dec 31, 2014 (4QFY14), up 25% from RM166.92 million a year ago, on better results from its subsidiary Affin Bank Bhd.

Its revenue climbed 25% to RM476.96 million from RM381.33 million a year ago. However, its earnings per share dropped to 10.74 sen from 11.17 sen in 4QFY13.

In a filing to Bursa Malaysia yesterday, the financial service conglomerate said Affin Bank was the biggest contributor to the group’s bottom line with an increased profit before tax of RM253.9 million in the quarter under review compared with RM198.1 million recorded in 4QFY13.

Nonetheless, Affin Holdings (fundamental score: 1.10; valuation score: 2.10) said the group’s performance for FY14 was impacted by a squeeze in its margin, along with the integration and merger costs of the businesses of Affin Hwang Investment Bank and Affin Investment Bank.

Hence, its full-year net profit dropped 6.9% to RM605.27 million from RM650.02 million, but its revenue rose 19.52% year-on-year to RM1.82 billion from RM1.53 billion.  

It recorded a loan growth of 8.5% in FY14, particularly in business term loans/financing, bill receivables, revolving credit and hire purchase.

The group’s loan to deposit from customers ratio stood at 82.6% as at Dec 31, 2014, while the ratio of consumer deposits to total deposits stood at 29%.

Moving forward, it said 2015 will be a challenging year for the local economy and the banking sector in particular, especially with the decline in global oil prices, the depreciation of ringgit, subsidy rationalisation and the implementation of the goods and services tax on April 1.

“While there are challenges, the group believes there is much potential to be harnessed.”

Its share price closed unchanged at RM2.94 yesterday, giving it a market capitalisation of RM5.71 billion.

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. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on February 27, 2015.