This article first appeared in The Edge Financial Daily on August 28, 2019

KUALA LUMPUR: Affin Bank Bhd’s net profit more than doubled to RM156.03 million for the second quarter ended June 30, 2019 (2QFY19) from RM73.31 million a year ago. The improved quarterly earnings were mainly due to a write-back of credit impairment losses.

Affin Bank reported a write-back of credit impairment losses of RM26.27 million in the quarter under review compared with the provision of RM91.87 million in the previous corresponding period.

The bank also attributed the better earnings to higher net gains on financial instruments at RM83.87 million compared with RM33.85 million in 2QFY18. Its earnings per share were at 7.9 sen from 3.8 sen a year ago.

Its quarterly revenue growth was nearly flat at RM497.93 million, compared with RM494.18 million for 2QFY18, according to its filing with Bursa Malaysia yesterday.

The bank’s net income increased 0.76% to RM497.93 million, from RM494.18 million for the previous year. Net interest income, however, fell 11.2% to RM186.99 million for 2QFY19, from RM210.51 million for the same period last year.

For the cumulative six months ended June 30, 2019, its net profit grew 36.55% to RM293.26 million from RM214.77 million a year ago. Revenue was flat at RM970.44 million against RM970.8 million last year. The bank’s net interest income slid almost 12% to RM375.67 million, from RM426.32 million a year ago.

Affin Bank said the banking industry is expected to be characterised by moderate loan growth and soft capital markets in 2019. “The prevailing market conditions, globally and domestically, will continue to drive volatility and uncertainty in the industry,” it said.

Affin Bank said the group is upgrading its capabilities and operating efficiencies specifically in the digital front to enrich customers’ experiences. “The group will continuously strive to maximise [the] synergistic value and put in place more strategies to drive the next phase of growth and meet the ever-changing business environment and requirements.”

Affin Bank noted its strategic focus for the current year remains on the retail and business banking segments, especially in the small and medium enterprise segment.

In a separate statement yesterday, its group chief executive officer Kamarul Ariffin Mohd Jamil said: “The strong results are testament to the success of our ongoing corporate strategy and the achievements in transforming the bank to further diversify its products and the digitalisation of its business.”

“Our current earnings reflect our resilience to remain focused on our key business areas, with emphasis on organic growth. Besides being a one-stop financial services provider and given a heightened competition in the banking and financial sector, we are all out looking for business opportunities,” he added.