PETALING JAYA: Despite being supported by enough capital and liquidity buffers, Affin Bank Bhd
will need to remain cautious while focusing on a disciplined approach this year.
In a filing with Bursa Malaysia, the banking group said this approach will include more prudent underwriting standards, closer portfolio monitoring and a heightened focus on early identification of emerging risks.
“Greater vigilance will be required in managing asset quality, with the potential for elevated impairments should macroeconomic conditions weaken further,” Affin Bank said.
The group also noted that the economy is projected to grow between 4% and 5% this year, backed by domestic demand, investment and the electrical and electronics or E&E and services sectors.
For its first quarter ended March 31, 2026 (1Q26), the group posted a 9% increase in net profit to RM135.49mil versus RM124.08mil in the same period last year.
According to the bank, the increase was driven by a surge in non-interest income and higher interest income.
Net interest income (NII) was up 13.3% at RM233.3mil, compared to the RM206mil that was recorded a year ago.
Non-interest income jumped 32.7% to RM186mil.
Affin Bank’s revenue was also 20% higher year-on-year (y-o-y) to RM654.44mil for the quarter under review, compared to RM543.9mil, mainly driven by higher income derived from net fee and commission income and NII.
As of March 31, 2026, Affin Bank’s total loans, advances and financing rose 12.6% y-o-y to RM82.1bil, while customer deposits increased by 3.5% to RM78.1bil.
Current account and savings account (Casa) rose 5.8% quarter-on-quarter to RM21.2bil, while the Casa ratio stood at 27.11% as at March 31, 2026, compared with 32.21% as at March 31, 2025.
As for its Islamic banking segment, Affin Islamic Bank Bhd saw a decrease of 33.1% in its pre-tax profit to RM58.3mil.
“Affin Islamic Bank Bhd registered a higher net financing income of RM28.4mil, backed by strong financing growth during the current quarter, but also provided for a higher allowance for impairment losses of RM41.2mil during the current quarter,” it noted.
Meanwhile, Affin Group president and group chief executive officer, Datuk Wan Razly Abdullah, said the bank’s 1Q26 results remained steady, and demonstrated resilience as the domestic banking sector adapts to persistent global supply and demand pressures.
He added the group’s base view is that the ongoing global conflict would persist until mid-year, after which oil prices are expected to begin normalising while trade and commerce are expected to return to normal in the second half of the year.
“The issuance of RM500mil additional tier-one capital securities or AT1CS in May received strong investor interest and was two times oversubscribed.
“This tier-one capital will strengthen the group’s capital position and improve its total capital ratio by 50 basis points. This is a prudent move, given the current global uncertainty.”
At the time of writing, Affin Bank’s stock price was at RM2.42.
