KUALA LUMPUR (July 27): Affin Bank Bhd has estimated an RM80 million day-one modification loss in fixed rate financing assumptions caused by the six-month moratorium on hire purchase loans.

Speaking to reporters at a press conference after the bank's annual general meeting (AGM) today, chief executive officer (CEO) Wan Razly Abdullah Wan Ali said that 63% of its total loan book of RM45 billion is under the current moratorium until the end of September.

He highlighted that the bank sees consumer confidence picking up as people are buying cars and properties. “People are still spending. There is a pickup, but we hope that it can sustain itself,” said Wan Razly.

Asked if Affin Bank will extend the loan moratorium beyond September, Wan Razly said that the bank is still looking into it and assessing how the group could assist its customers.

“I think, when we look at the Covid-19 situation, it will take time for the economy to recover. The Malaysian public need more than six months in order to recover.

“As we speak, the economy is still in recovery mode. The government is engaging the banks and we are looking at how we can assist our customers,” he said, adding that the bank had been proactive — engaging and assisting its customers in whatever way possible.

In terms of non-performing loans (NPLs), Wan Razly said the bank will “only get the better of it when the moratorium ends in September”.

“The Malaysian economy is building up its recovery, but how long this recovery will take? We still have to monitor it,” he said.

“We talked to almost 800 SME (small and medium enterprise) customers and only 50 came back to restructure their loans ... it is still a bit early to tell. There may be many that are still hoping that the economy can recover quicker,” said Wan Razly. He anticipates better visibility in the fourth quarter.

Thus, the bank has been very conservative in selecting its customers.

At the closing at 5pm today, shares in the bank were down one sen or 0.63% at RM1.57, valuing it at RM3.12 billion.

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