KUALA LUMPUR: AFFIN Group achieved a Profit Before Tax (PBT) after zakat of RM293.1 million for the six months ended 30 June 2024 (1H2024), marking a 15.2% decrease from RM345.7 million in the same period last year (1H2023), primarily due to Net Interest Margin (NIM) compression. Despite this, the Group demonstrated strategic growth with total assets increasing by 7.2% to RM108.2 billion, up from RM100.9 billion in the previous corresponding period, driven by a 10.5% rise in loan and financing portfolios, reaching RM69.0 billion.
Datuk Wan Razly Abdullah, President & Group Chief Executive Officer of Affin Bank Berhad, stated that the Group expects NIM to normalize by the first half of 2025 under the AX28 Strategic Plan. This outlook is bolstered by anticipated Federal Reserve rate cuts and improving economic conditions in Malaysia. He emphasized the Group’s focus on optimizing operational costs, enhancing customer solutions, and maintaining high credit quality amidst soft economic conditions.
In tandem with these efforts, the Group is advancing its digital transformation initiatives. Pending regulatory approval for Go-Live, the Digital Core enhancements include improvements to CASA, Deposits, and e-wallet capabilities, with a new Mobile Banking Platform scheduled for a December 2024 launch to bolster the deposit franchise.
The Group remains committed to its AX28 strategic pillars: Unrivalled Customer Service, Digital Leadership, and Responsible Banking with Impact. Notably, achieving an NPS Score of +69 underscores its customer-centric approach. Affin Private Banking is set to launch in September 2024 to drive further expansion.
Looking ahead, the Group anticipates achieving its Digital Leadership goals by end-2025, with potentially transformative impacts from the delayed entry of Sarawak State Shareholder, enhancing customer base and liquidity by end-2024.
In recognition of its excellence, the Group received prestigious accolades including ‘Malaysia Domestic Cash Management Bank of the Year for AFFINMAX’ and ‘Best Retail Bank in Malaysia and Best Syndicated Loan in Renewable Energy’ by various industry awards.
Financial Metrics Overview
- Net Interest Income (NII): RM386.0 million, down 11.5% from RM436.2 million.
- Islamic Banking: Affin Islamic Bank Berhad’s PBT increased by 12.0% to RM148.8 million, supported by a 13.9% growth in Gross Financing.
- Non-Interest Income: RM284.2 million, up 7.8% from RM263.6 million.
- Asset Quality: The Gross Impaired Loan (GIL) ratio stood at 1.89% in 1H2024 compared to 1.78% in 1H2023.
- Loan Loss Coverage (LLC) and Loan Loss Reserve (LLR): LLC at 100.06% and LLR at 130.12%.
- Operating Expenses: Increased to RM746.7 million, with a Cost-to-Income ratio of 74.7%.
- Loans and Deposits Growth: Total loans reached RM69.0 billion, with CASA ratio at 25.89% and customer deposits at RM71.2 billion, down 0.4% YoY.
- Capital Adequacy and Liquidity: Total Capital ratio at 16.84%, Tier 1 capital ratio at 14.27%, CET1 capital ratio at 12.84%, and Liquidity Coverage Ratio at 170.23%.
