KUALA LUMPUR (Feb 28): Affin Bank Bhd’s fourth-quarter net profit fell 15.21% to RM143.75 million from RM169.54 million a year ago, due to higher interest expenses coupled with lower net fee and commission income.
Earnings per share for the quarter ended Dec 31, 2018 dropped to 7.4 sen from 8.92 sen previously, the group said in a filing with Bursa Malaysia.
Net interest income fell by 7.22% to RM207.53 million from RM223.69 million previously.
The group’s net income for the quarter also declined 15.2% to RM453.56 million from RM534.7 million in the year-ago fourth quarter.
For FY18 as a whole, Affin Bank’s net profit went up 20.4% to RM503.09 million or 25.89 sen per share from RM417.86 million or 23.98 sen per share in FY17.
Net interest income fell 0.65% to RM845.4 million from RM850.9 million in FY17 while net income grew by 23.1% to RM1.92 billion from RM1.56 billion
Affin Bank said its strategic focus in FY19 will remain on both retail and business banking segments, especially in the small and medium enterprises (SME) segment as well as transactional banking.
“The bank will also be focusing on brand visibility, compliance requirements, improving asset quality and liquidity management,” it said.
Given that the expansion of the SME segment is pivotal to Malaysia’s economic growth, Affin Bank said it is placing greater emphasis in this area.
“The group collaborates with Small and Medium Enterprises Association (Samenta) Malaysia by engaging with its members to understand their financing needs.
“The group also introduced SMEngage which is a singular identity initiative to promote and support activities for SME customers through a series of programmes which include seminars, customer engagement and financial knowledge sharing,” it said.
Affin Bank added that FY19 will be another momentous year for it as it continues its growth path.
“In addition, the reorganisation of the group which was completed in year 2018 is expected to strengthen the bank’s capital position.
Leveraging on the group's infrastructure, the bank will continue to strengthen its existing offerings, accelerate the development of its digital banking solution and further improve its innovativeness to meet customers’ requirement,” it said.
However, Affin Bank said the banking industry is expected to be dragged by moderate loan growth with fee-based income expected to be soft due to volatile capital markets.
“Caution will still prevail in the industry due to the soft economy outlook. Selective asset growth will be the focus for the banks. Impairment allowances will remain consistent which could buffer the banks' bottom lines. Competitive lending rates are expected in the near term as banks strive to achieve their loan growth targets.
“Although Malaysian banks may see earnings come under pressure due to keen competition on both loans and deposits, their asset quality, capital as well as funding and liquidity profiles remain strong. Malaysian banks' credit metrics compare favourably against its regional peers,” it added.
In a separate statement, Affin Bank said overall for 2019, it is committed to upgrading its capabilities and operating efficiencies specifically on the digital front to enrich customer experience.
The group said it will continuously strive to maximise synergistic value from within and put in place more strategies to drive the next phase of growth and meet the ever-changing requirements of the business environment.
“Going forward, the group remains positive on the industry outlook and will continue to build resilience across its business and drive efficiency savings in its business operations, with collaborative efforts to better serve its enlarged clientele by focusing on the client's experience,” it said.
Affin Bank’s share price closed two sen or 0.85% lower at RM2.32 today, giving it a market capitalisation of RM4.61 billion.