Affin 3Q16 earnings up 36 per cent to RM140 million
KUCHING: AFFIN Holdings Bhd’s (Affin) earnings for the third quarter of 2016 (3Q16) ended September gained by 36 per cent year-on-year (y-o-y) to RM139.65 million from RM102.39 million recorded in 3Q15 ended September 2015.
Affin in its accounts notes filed to Bursa Malaysia yesterday said the higher earnings for 3Q16 was attributed to lower allowance for loan impairment, increase in other operating income, Islamic banking income and net interest income and higher share of profits in associate company.
The group reported a profit before tax (PBT) after zakat of RM185.5 million in 3Q16 as compared to RM149.1 million registered in 3Q15, signifying a 24.4 per cent increase.
Affin added 3Q16 revenue increased by 9.7 per cent y-o-y to RM504.40 million from RM459.79 million generated in 3Q15.
For the nine months period to September 2016 (9M16), Affin said revenue improved by 5.3 per cent y-o-y to RM1.41 billion from RM1.34 billion generated in 9M15.
Net profit for 9M16 jumped by 44 per cent y-o-y to RM392.61 million from RM271.86 million recorded in 9M15.
Elaborating further, Affin in a statement said the group’s banking business, AFFIN Bank Bhd (ABB) registered higher PBT of RM432.6 million for 9M16. This was a significant improvement of 34.6 per cent as compared to RM321.3 million seen in 9M15.
The achievement was thanks to lower allowance for loan impairment, higher Islamic banking income as well as higher other operating income.
Furthermore, the group’s Islamic banking, AFFIN Islamic Bank Bhd reported an improved PBT of RM97.1 million as compared to RM83.7 million for the same period in the previous year, in line with its Priority Islamic Policy (PIP).
PIP is the group’s strategic move to be aligned with the Central Bank of Malaysia’s Financial Sector Blueprint which calls for financial institutions to enhance its Islamic financing portfolio to 40 per cent in 2020.
Apart from that, Affin revealed that its investment banking operation, Affin Hwang Investment Bank Bhd’s (Affin Hwang) third quarter PBT further improved from RM30.9 million to RM35.8 million quarter-on-quarter.
For the nine-month period, the segment’s PBT increased from RM62.5 million previously to RM90.9 million this year.
Affin Hwang achieved a credible performance through improvements in fee income contribution from its asset management and investment banking businesses, while personnel costs were reduced significantly despite the challenging market conditions.
Affin Hwang’s asset management business contributed a PBT of RM45.6 million for 9M16.
Affin Hwang IB’s PBT is before the amortisation of identifiable intangible assets of RM10.4 million at AFFIN Group level arising from the acquisition of HwangDBS Investment Bank Berhad in 2014.
Moreover, Affin disclosed that the performance of its jointly controlled AXA AFFIN Life Insurance Berhad (AALI) for 3Q16 was impacted by the movement in Malaysia Government Securities (MGS) rates which resulted in higher reserves for future poli- cyholders’ liabilities.
As a result, Affin noted AALI recorded a pre-tax loss of RM20.6 million for 9M16.
Nonetheless, Affin highlighted that the group’s 34.5 per cent associate, AXA AFFIN General Insurance Bhd (AAGI) recorded a PBT increase of 50.4 per cent from RM81.7 million to RM122.9 million y-o-y.
On top of that, its other business segment, AFFIN Moneybrokers Sdn Bhd recorded a lower PBT of RM1.2 million for 9M16 due to lower net brokerage income.
Commenting on the group’s prospects, Affin said its transformation plan, Affinity covers 32 new transformation projects is expected to catapult the bank to a new level once it reaches full completion in 2019.
In addition, Affin will be exploring potential business prospects within the Lembaga Tabung Angkatan Tentera (LTAT) or Boustead Group of Companies to capitalise on synergies and opportunities for growth.
“The group will take a cautiously optimistic approach for the investment banking segment.
“The group’s diversified stable of businesses combined with robust capitalisation will be tapped on to mitigate the anticipated market volatility.
“The focus will remain on driving efficiency as well as collaborating within the group to improve the segment’s ability to present a broader range of products and services to its enlarged clientele.
“The group’s life insurance segment expects to maintain its growth trajectory through focusing on expanding consumer reach through the expansion of distribution channels and tailored product development.
“The group’s general insurance segment will place special emphasis on customer centricity through various transformation projects and a keen focus on digital enablers,” Affin said.