ACSM EYES BIGGER INSURANCE OPS
Credit provider wants to leverage Aeon Co and Aeon Big’s 6m customer database
AEON Credit Service (M) Bhd (ACSM) aims to expand its insurance division to be one of its core businesses once the relevant infrastructure has been put in place.
Chairman Datuk Abdullah Mohd Yusof said the company wanted to grow the insurance business fast as there was a huge potential banking on its six million customer database for Aeon Co and Aeon Big.
“We want it to be a core business. We have to build the infrastructure to grow the business,” he said after the company’s annual and extraordinary general meetings, here, yesterday.
He added that the insurance business contributed about RM11 million to ACSM’s overall revenue in the financial year ended February 28 this year.
Abdullah said the insurance segment was a fee-based business which would not require substantial capital expenditure.
“We will utilise our current database of customers and invest in digital marketing as part our investment,” he said.
ACSM managing director Kenji Fujita said the non-bank financial provider was confident of growing in the Malaysian market.
“Only about 70 per cent of Malaysians own insurance, compared to countries like Japan, which has 100 per cent insurance coverage,” he said.
Fujita said the company’s insurance segment collaborates with Prudential and Tokio Marine Insurance (Malaysia) Bhd.
Meanwhile, ACSM has proposed to raise RM432 million via a rights issue, of which RM272.4 million will be used for working capital to finance new receivables.
It will also use RM155 million to repay its long-term loan, which is due within six months.
“Estimation of the whole exercise makes up about RM4.6 million or one per cent of the total fund raised,” Abdullah said, adding that the rights issue was intended for its business expansion.
ACSM will also invest more in information and technology, human resources as well as digital marketing to continue with its transformation projects.
Abdullah said the investment would enable the company to improve its operation efficiency on its credit assessment system, which in turn would improve its credit cost to serve customers better.
“On overall company growth, we are confident to, at least, maintain our financial performance for the current financial year on the back of an encouraging market outlook in Malaysia,” he said.
“We recorded double-digit growth long time ago. Although the economy is not as good as it used to be, we still have between 4.2 and 4.8 per cent GDP growth,” Fujita said.
For the financial ended February 28, the company’s revenue increased 14.2 per cent to RM1.10 billion compared with RM965.23 million in the previous year, due to stronger growth in its vehicle easy-payment and personal financing.
Net profit rose 16.13 per cent to RM265.03 million against RM228.22 million in the same period a year ago.