KUALA LUMPUR (May 29): Affin Bank Bhd’s net profit dropped nearly 10% to RM123.57 million in the first quarter ended March 31, 2020 (1QFY20) compared with RM137.23 million a year ago.
The banking group’s earnings per share came in lower at 6.22 sen, from 6.94 sen in 1QFY19. However, its quarterly revenue grew 33.4% year-on-year (y-o-y) to RM630.38 million from RM472.52 million. The group’s net asset value per share was at RM4.62.
Like its banking peers, Affin Bank’s earnings were dragged down by credit impairment losses of RM117.1 million compared with a write-back of RM9.9 million in 1QFY19, in addition to higher overheads, according to a bourse filing.
However, a RM136.1 million net gain in the sales of financial instruments and higher net fee and commission income of RM13.7 million helped to soften the blow caused by provision.
For its commercial banking segment, Affin Bank reported a profit before tax (PBT) of RM31.9 million in 1QFY20, down from the RM103.7 million in 1QFY19. The decline was attributed to a credit impairment charge of RM71.2 million, RM20.5 million in overhead expenses and lower net interest income (NII) of RM15.8 million.
Affin Islamic Bank Bhd also registered a lower PBT of RM20 million, from RM32 million as it was dragged by a RM35.6 million increase in its financing allowance.
In the case of its investment banking division, Affin Hwang Investment Bank Bhd posted an 182% increase in PBT to RM127.4 million, from RM45.2 million due to the RM85 million net gain on the sale of financial instruments and RM14.4 million in net fee and commission income.
Its 63%-owned Affin Hwang Asset Management Bhd’s PBT dropped 15.2% to RM21.4 million, from RM25.2 million due to mark-to-market (MTM) loss on losses on financial instruments of RM6.2 million.
For its insurance segment, AXA Affin Life Insurance Bhd registered a wider pre-tax loss of RM4.6 million as investment income came in lower at RM8.4 million and overhead expenses came in higher at RM5.2 million.
AXA Affin General Insurance Bhd reported a PBT of RM500,000, versus RM29.1 million a year ago due to drop in earned premiums at RM15.7 million and higher net claims of RM11 million.
In a separate statement, Affin Bank chief executive officer Wan Razly Abdullah Wan Ali said the first quarter saw the bank strengthening its business infrastructure.
“We are committed to deliver superior products and services to our customers despite the challenging operating environment.
“We are accelerating our digital readiness and encouraging our customers to use our new retail and corporate internet banking platforms to manage their banking transactions online,” he said.
Affin shares finished 3.25% or five sen higher at RM1.59, valuing it at some RM3.16 billion. The banking group is trading at price-to-book value of 0.34 times.