Affin Bank's branch in Seri Petaling, Kuala Lumpur. Affin Bank Bhd is 100% owned by Affin Holdings Bhd. (Photo taken by Hafidz Mahpar for Star Online)
PETALING JAYA: Affin Holdings Bhd
’s earnings for its third quarter ended Sept 30 nearly halved to RM73.26mil from RM139.65mil a year ago due to higher overhead expenses and loan impairment.
Revenue, however, saw a rise of 8.38% to RM546.66mil from RM504.40mil a year ago.
In a filing with Bursa Malaysia, the bank said the increase in other operating income, Islamic banking income and net interest income totalling some RM236.5mil, and the reduction in allowance for securities impairment of RM17.7mil were not sufficient to cushion the rise in both overhead expenses and allowance for a loan impairment of RM232.3mil and RM66mil, respectively.
It also said that the share of profits in associates was lower by RM9.8mil for the period under review.
Affin’s earnings per share for the nine-month period was 17.59 sen, while net assets per share as at Sept 30 was RM4.66.
Its commercial banking segment reported a lower pre-tax profit of RM55.4mil for the current quarter compared to RM165mil for the preceding year’s corresponding quarter.
“The Islamic banking income, other operating income and net interest income were higher by RM42.5mil, RM9.9mil and RM7.7mil, respectively. However, these were not sufficient to offset the increase in both overhead expenses and allowance for loan impairments of RM102.5mil and RM66.2mil, respectively,” it said.
“The increase in overhead expenses was attributable to a higher personnel cost of RM101.5mil due mainly to provision for the voluntary separation scheme of RM48mil, salary adjustment for staff under the union and the higher headcount,” it added.
Meanwhile, Affin Islamic Bank Bhd registered a higher pre-tax profit of RM31.5mil for the current financial quarter from RM28.6mil for the preceding year’s corresponding quarter.
“The increase in operating income of RM44.5mil in line with the financing growth of 16.1% was not sufficient to cushion both the increase in overhead expenses of RM29.1mil and the allowance for financing impairment of RM23.5mil for the period under review as compared to a net write-back of RM1.8mil for the same period last year,” the bank said.
Moving forward, Affin said its capital position is expected to be further strengthened by its corporate exercise to unlock more value for shareholders and provide better returns.
Its ongoing re-organisation, which obtained approval from shareholders in October, will help it improve its efficiencies, adaptability as well as productivity so that it may thrive in the highly competitive and dynamic banking sector.
“Affin foresees strengthened loan growth for the consumer, corporate and small and medium enterprise segments. We will continue to focus on prospects for profitable growth undertaken through the Affinity Transformation Programme,” it said.
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