This article first appeared in The Edge Financial Daily on November 29, 2019

KUALA LUMPUR: Affin Bank Bhd’s net profit for the third quarter ended Sept 30, 2019 (3QFY19) halved to RM72.4 million, from RM144.56 million a year earlier, mainly due to an allowance for credit impairment losses of RM43.11 million as well as a lower net interest income.

The net interest income fell some 15% to RM180.63 million from RM211.55 million a year ago.

Earnings per share fell to 3.65 sen from 7.44 sen, according to the bank’s filing with Bursa Malaysia.

The group said its quarterly revenue slipped 4.43% to RM474.26 million from RM496.25 million a year earlier.

For the cumulative nine months ended Sept 30, 2019 (9MFY19), Affin Bank reported a slightly higher net profit of RM365.66 million, up 1.76% from RM359.34 million in the same period last year.

This was despite a 1.52% decline in the nine-month revenue to RM1.44 billion from RM1.47 billion.

The bank attributed the improved earnings to higher net gain on financial instruments of RM106.3 million and lower allowance for impairment losses of RM78.4 million.

It saw a 90.71% plunge in allowance for credit impairment losses at RM6.98 million for 9MFY19, from RM75.45 million previously.

During the period, net interest income fell 12.84% to RM556 million, from RM637.87 million previously.

Non-interest income rose 11.3% to RM588.5 million from RM528.8 million due to higher net gain on financial instruments of RM106.3 million, Affin Bank added in a separate statement.

“The fee-based income was however reduced by RM28 million to RM320.9 million mainly due to the weaker market environment, particularly in the asset management and stockbroking businesses,” it added.

The group’s total loans, advances and financing shrank by 4.8% to RM46.6 billion for 9MFY19 due to rebalancing of portfolios.

The group’s customer deposits eased 0.8% to RM56.9 billion, while the loan-to-fund ratio was stable at 77% as at Sept 30, 2019 versus 81.1% as at Dec 31 last year.

“We will continue to deliver our innovative financial solutions to our customers as we believe that the Malaysian economy holds much potential for a full-serviced financial group such as us,” said Affin Bank group chief executive officer Kamarul Ariffin Mohd Jamil.

The bank said it is upgrading its capabilities and operating efficiencies specifically on digital front in enriching customer experience.

Its strategic focus for 4QFY19, it said, will remain on both retail and business banking segments, especially the small and medium enterprise segment.

Shares in Affin Bank closed unchanged at RM1.98 yesterday, valuing the group at RM3.93 billion.