KUALA LUMPUR (Feb 26): Affin Bank Bhd has reported a net loss of RM9.36 million for the fourth quarter ended Dec 31, 2020 (4QFY20), compared with a net profit of RM122.11 million a year ago, due to a higher allowance for impairment losses and operating expenses.

This is the bank's first quarterly loss in more than 16 years when it reported a net loss of RM14.72 million for 2QFY03.

Quarterly revenue was, however, up 28.6% to RM620.8 million from RM482.66 million in 4QFY19, its bourse filing showed.

The group declared a dividend of 3.5 sen per share.

The group's quarterly operating expenses were 23.2% higher at RM353.8 million, from RM287.1 million in 4QFY19, due to higher personnel expenses, while allowance for impairment losses was 5.7 times higher at RM266.1 million from RM46.6 million.

Still, net interest income rose 38.6% to RM233.46 million from RM168.39 million.

On a quarter-on-quarter basis, the bank's loss compared with a net profit of RM48.72 million in 3QFY20, while revenue was down 10.6% from RM694.2 million.

For the full FY20, the bank's net profit fell 52.8% to RM230.32 million, from RM487.77 million in FY19, while revenue grew 18.3% to RM2.26 billion from RM1.91 billion.

Affin Bank attributed the lower earnings to higher allowances for credit losses, particularly Covid-19-related pre-emptive provisioning, higher operating expenses and a one-off modification loss relating to pandemic relief measures of RM80 million.

Net interest income grew by 3.9% to RM772.14 million in FY20, from RM743.12 million in FY19, driven by improved net interest margin from falling cost of funds following an increase in current and savings account composition and the repricing of deposits post overnight policy rate cuts.

As at Dec 31, 2020, the gross impaired loan ratio for the group increased by 52 basis points to 3.52% compared with 3% as at Dec 31, 2019.

Affin Bank president and group chief executive officer Datuk Wan Razly Abdullah Wan Ali said 2020 was a tough year for the bank in terms of financial impact and provisioning due to the asset quality issues arising from the Covid-19 economic slowdown.

"We are, [however,] optimistic that the government's roll-out of the vaccine programme will accelerate Malaysia's economic recovery in the coming months," he said in a statement.

Affin Bank's shares closed down two sen or 1.12% to RM1.76 today, valuing the bank at RM3.66 billion.