Affin Bank breaking barriers on all fronts


THERE is a new tagline at Affin Bank: breaking barriers for greater rapport. Chief Executive Officer Datuk Hamidy Abdul Hafiz is all set for his staff force of 2,500 to do things in new ways and deliver the results. 

“Forget about yesterday,” is his constant reminder. He is always looking for new and unconventional ways of doing things, while at the same time, keeping a firm eye on wastage, proper procedures and greater accountability. 

“Sign on the job,” is his severe way of keeping track on mistakes. When it comes to loan approvals, it is not going to be easy either. No more name-dropping, every loan proposal goes through the same screening process. 

Hamidy wants to turn Affin Bank into a “happening'' workplace, where great talents meet and are nurtured. His new management comprises professionals from foreign and large local banks as well as corporations. 

The credit risk department and treasury have been expanded. More changes are coming. 

With emphasis on pride in the job, he wants his staff to be empowered to make the proper decisions, go to the market and land the deals. 

His eye may be on cutting wastage, but when it comes to the right occasion, he will do the necessary. And he shows that he cares. 

For instance, putting up trainees in proper accommodation and helping staff members with monthly income of below RM2,000 to buy school uniforms at the end of the year. 

Attitude is important. He doesn’t want people to think that: “Just because a mistake has occurred before, it can occur again...so what?” He is particular that counter signatures must be made after proper scrutiny of the documents. 

His staff relate stories of how keenly he follows newspaper reports and tips them off on new developments regarding their clients. 

The entire message is to be on the ball when on the job. With competition growing and ongoing efforts to improve performance and image at Affin Bank, the CEO really has an immense task to bring the bank to shape. 

In view of the group’s aspirations to be an acquiror rather than acquiree, Hamidy’s challenge looks all the more daunting. He has confidence in his team and stresses that all achievements should not be personalised.  

By the end of the year, the group will be in a stronger position to explore new avenues, locally and regionally. 

At an analysts’ briefing early this week, the group had highlighted the potential for improvement in asset quality. ECM Libra Securities noted: “Boustead Holding Bhd’s controlling presence of PSC Industries Bhd sends a good signal for potential recoveries of chunky non-performing loans (NPLs) sitting in Affin Bank’s books. 

“Assuming a full recovery of the reported NPLs amounting to RM400mil, Affin Holdings could ultimately reduce its net NPL ratios by an estimated 2.3%, based on financial year 2005 NPL estimates.” 

Affin Holdings' net NPL ratio stands at 16%, compared with 23% previously. 

The upside in absorbing and cleaning up PSCI will not be smooth, ECM cautions, but investors would be sitting on a relatively defensive portfolio of earnings. 

With continuous efforts for corporate NPL resolution, coupled with clawbacks or specific and general provisions, loan loss reserves were likely to remain within the 30% level, the research house said. 

On track for year-end completion is the proposed acquisition of a 37% stake in Affin Merchant Bank from Malaysian International Shipping Corporation.  

Insurance is going to be another big growth area, especially with the completion of the purchase of Tahan Insurance, which has a life insurance business.  

According to ECM, Tahan is likely to be a joint venture between Affin Holdings and AXA-Affin Insurance. 

OSK Securities expects further operational efficiencies with the merger of the finance and commercial bank at Affin, and a reduction in the existing 106 branches to 81 by end-2006. 

“For 2006, management expects to see its loan book growing 5% to 6% (+0.1% in the first half of 2005 and 0.8% in 2004).  

“Borrowings of RM800mil at the holding level will be reduced to RM200mil by mid-2006, resulting in annual savings of more than RM30mil,” OSK said. 

 AFFIN :  [Stock Watch]  [NewsAFFIN-A :  [Stock WatchAFFIN-WA :  [Stock Watch]

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