Affin maintains Q2 earnings at almost same level

Affin Bank. AZMAN GHANI / The Star REPORTER: JOSEPH CHIN

KUALA LUMPUR: Affin Holdings Bhd's earnings for the second quarter ended June 30, 2016 -- at RM137.4mil -- were little changed compared with RM139.4mil a year earlier.

According to its unadited interim financial report to Bursa Malaysia on Friday, the marginal 1.4% drop in earnings was due to the higher tax paid. At the operating profit level (excluding allowances for impairment losses), there was a marginal increase to RM189.37mil from RM189.13mil a year earlier.

Revenue, meanwhile, grew 6.1% to RM476.7mil.

In contrast, the half-year (H1) results showed a big improvement, with earnings surging 49.3% to RM252.96mil. This was mainly due to higher allowances made for impairment losses on loans, advances and financing in the same period last year -- RM137.84mil against only RM592,000 this year.

Excluding these allowances, the financial services group’s operating profit for H1 slipped 1% year-on-year to RM343.68mil.

The group’s primary contributor, the Affin Bank Bhd group, recorded a profit before tax of RM270.5mil for the half-year ended June 30, 2016, surpassing the previous year’s RM176.7mil by 53.1% or RM93.8mil. “This was achieved on the back of lower allowance for loan impairment, higher Islamic banking income as well as higher net interest income,” Affin said.

On the group’s prospects, Affin said in a press statement that the group had developed a transformation plan named Affinity that would set the stage for its future transformation.

“In order to create the necessary impact and outcome which are sustainable over the long term, the transformation programme aims for major and deep-seated changes which cover an end-to-end view of the business specifically on eight pillars,” it said.

The pillars are target customer segments, distribution channels, products & solutions, operations, technology, performance management, and risk & compliance.