“Given the high interest-rate environment, people will be wanting to preserve their cash, leading to lesser spending. Hence, we see a tapering of demand,” Wan Razly said.
PETALING JAYA: Affin Bank Bhd anticipates a moderation in its loan growth following the robust 15.4% expansion achieved in its financial year ending on Dec 31, 2022 (FY22), due to the global economic headwinds.
President and group chief executive officer Datuk Wan Razly Abdullah expects a slowdown in loan growth to between 10% and 11% in FY23.
This is mainly due to the strong likelihood of a recession in both the United States and Europe, which is expected to have a knock-on effect on Asia including Malaysia.
“Given the high interest-rate environment, people will be wanting to preserve their cash, leading to lesser spending. Hence, we see a tapering of demand,” Wan Razly said after Affin’s AGM yesterday.
On its net interest margins (NIM), he believes it is still too early to provide a projection guidance.
He acknowledges that it is going to be tough to grow NIM, as banks have to try to lower their cost of funds.
However, he noted that the bank is striving to expand its NIM from the 2.01% achieved last year.
Wan Razly said the bank is focused on growing its current account savings account (CASA) ratio and hopes to achieve a 25% CASA ratio by FY23 and 30% by FY25.
“We will remain focused on expanding our CASA franchise, growing our high margin business while maintaining and improving our asset quality,” he said.
Affin’s CASA ratio increased to 23.50% in FY22 from 23.04% in FY21.
For FY23, Affin plans to focus on two main areas – retail banking and SME banking.
Wan Razly said the bank will remain focused on digitisation, as it has allocated RM300mil, which accounts for 80% of its total capital expenditure, to accelerate its digitalisation efforts this year.
