KUALA LUMPUR (Aug 19): Affin Holdings Bhd saw a marginal decline of 1.4% in net profit to RM137.4 million or 7.07 sen a share for the second quarter ended June 30, 2016 (2QFY16) from RM139.39 million or 7.17 sen a share a year ago due to higher taxation.

Its net income rose 6.1% to RM476.72 million in 2QFY16 from RM449.2 million in 2QFY15, on improved interest income, Islamic banking income and other operating income during the quarter under review.

For the cumulative six months (1HFY16), its net profit increased 49.3% to RM252.96 million or 13.02 sen a share from RM169.47 million or 8.72 sen a share in 1HFY15. Net income also rose 2.9% to RM903.64 million from RM877.87 million in 1HY15, on higher interest income and Islamic banking income totalling RM31.6 million.

In a filing with Bursa Malaysia today, Affin attributed the improved 1HFY16 earnings to lower allowance for loan impairment of RM137.2 million, the increase in net income, as well as higher share of profits in associate of RM9.2 million.

"These were partially offset by higher overhead expenses and higher finance cost of RM29.4 million and RM7.7 million respectively. In addition, there was a write-back of allowance for securities impairment of RM23.5 million in the previous financial year," it said.

The group's primary contributor Affin Bank Bhd recorded a pre-tax profit of RM270.5 million for 1HFY16, surpassing the previous year's RM176.7 million by 53.1% or RM93.8 million. This was achieved on the back of lower allowance for loan impairment, higher Islamic banking income as well as higher net interest income.

In a separate statement today, Affin said its net assets per share improved to RM4.42 as at June 30, 2016 compared with RM4.26 as at Dec 31, 2015, while its annualised after tax return on equity (ROE) and after tax return on assets (ROA) for 1HFY16 were 6% and 0.7% respectively.

On prospects, Affin said despite the softer economic growth outlook, the bank remains cautiously optimistic on the prospect for growth and continues to explore new products and services that satisfy the customers' needs with the best value possible.

"The group's diversified business profile coupled by a sturdy capitalisation should mitigate the expected volatility in the financial markets. The group takes cognizant of the increasingly-competitive investment bank and asset management operating environment, which are highly dependent on the overall market sentiments," it added.

As at 2.47pm, Affin shares traded unchanged at RM2.15, with 548,300 shares done. Its market value stood at RM4.14 billion.