KUALA LUMPUR: Amid a strong earnings recovery in the nine months to Sept 30, 2022, Affin Bank Bhd is pushing towards realising its A25 transformation plan over the next three years.
"Our financials continue to demonstrate resiliency, stable and consistent growth.
"With the year coming to a close, I’m pleased to report that the Group has met and even exceeded several of our A22 targets," said president and group CEO Datuk Wan Razly Abdullah in a statement.
A25, a multi-year strategic plan that revolves around enhancing customer experience, digitalisation and embarking on ESG initiatives, was unveiled in an announcement in August this year.
Under the plan, the group aims to achieve 10% return on equity (ROE), drive revenue growth and double its customer base to two million by 2025 by focusing on retail community banking and SME enterprise banking.
According to the group, it will also push its digitalisation plan which will see an increase in its information technology capital expenditure to about RM330mil in 2023 from RM316mil this year.
For the nine months ended Sept 30, 2022, Affin Bank posted a net profit of RM1.16bil, which was more than three times the net profit of the same period in 2021.
Its earnings per share jumped to 54 sen from 15.19 sen in the comparative period.
Of note, Affin Islamic Bank Bhd was a significant contributor to the group, with a pre-tax profit of RM233.9mil, up 62.3% from the 2021 period due to a more robust financing growth.
Revenue, meanwhile, was up to RM2.73bil from RM1.67bil in 9M21, with a large contribution of non-interest income of RM1.47bil, owing mainly to the one-off gain from the divestment of Affin Hwang Asset Management Bhd.
This gain was offset with lower net gain on sales of financial instruments, other income net fee and comimssion income.
According to Wan Razly, the bank's net interest income (NII) in 9M22 rose 16.2% to RM756.1mil compared to 9M21.
In the third quarter of the year alone, the group's net profit improved to RM872.37mil from RM133.2mil in the same quarter last year while revenue tripled to RM1.62bil.
The group's loan and financing grew 16.6% year-on-year (y-o-y) with net interest margin (NIM) expanding 2.01% from 1.95% in 9M21 as it focused on building its current account savings account (Casa) franchise.
Over the nine months period, gross impaired loan (GIL) ratio decreased further to 1.91% as compared with 3.14% in the same period las year due to strong recovery efforts and tigher underwriting standards.
The loan loss coverage and loan loss reserve stood at 112.25% and 150% respecitlvely, hitting its A22 target ahead of schedule.
As at 9M22, the group's total loans, advances and financing grew 16.6% y-o-y to RM57.2bil, on the back of 60% growth in the community banking segment.
Meanwhile, housing loans grew 24.8% while auto finance loans rose 16.5%.
Casa came in at RM13.7bil in 9M22 and Casa ratio stood at 21.4%.
The group's customer deposits increased 11.3% y-o-y to RM64bil on the back of the Casa iniatives delivering positive results.
As at 9M22, the group’s total capital ratio was at 20.11%, Tier 1 capital ratio at 17.74% and CET1 capital ratio at 16.33%.