Affin Holdings Q1 net profit rises to RM120mil

Good results mainly due to higher Islamic banking, net interest incomes

PETALING JAYA: Affin Holdings Bhd’s net profit for its first quarter ended March 31, 2017 rose 4% to RM120.18mil compared with RM115.57mil in the previous corresponding period, mainly due to the increase in other operating income, Islamic banking income and net interest income totalling RM82.7mil.

In a filing with Bursa Malaysia yesterday, the company also said higher overhead expenses of RM56mil and lower share of profits in its associate of RM8.2mil also contributed to the improved earnings.

“For the period under review, there was an allowance for loan impairment loss of RM5.8mil as compared to a write-back of RM1.6mil in the previous year,” Affin said.

Revenue in the first quarter increased to RM509.60mil from RM426.92mil a year earlier.

Affin said the results of the commercial banking segment was mainly attributable to the Affin Bank Bhd group which reported a pre-tax profit of RM125.3mil for the quarter ended March 31, 2017 as compared to RM123.1mil for the preced- ing year’s corresponding quarter.

“This was mainly due to the increase in Islamic banking income, net interest income and other operating totalling RM28.9mil, net of the allowance for loan impairment of RM6.7mil compared to a write-back of RM1.7mil in the previous year.”

The results of its investment banking segment, meanwhile, was attributed to Affin Hwang Investment Bank Bhd, which reported a higher pre-tax profit of RM37.6mil in the first quarter of 2017 compared to RM20.8mil in the previous corresponding period.

This, Affin said, was mainly due to higher other operating income of RM52.2mil net of higher overhead expenses of RM38.6mil.

“In the insurance segment, AXA Affin Life Insurance Bhd saw improvement in its results, with a lower pre-tax loss of RM5.3mil compared to the pre-tax loss of RM11.6mil in the first quarter of 2016, as a result of higher investment income and lower reserves for future policyholders’ liabilities due to movement in Malaysian Government Securities rate.”

The company added that AXA Affin General Insurance Bhd, meanwhile, recorded a pre-tax profit of RM15.5mil for the current quarter.

On the prospects of its commercial banking segment, Affin said that its strategic objectives would be to focus on strengthening its fee-based income from digital banking, unit trust and credit card to mitigate the impact of margin compression on net interest income.

On its investment banking segment, it said its securities and asset management businesses should benefit from the overall improved market sentiments, especially when the economic activity is projected to improve in 2017.

Affin, meanwhile, said it expects the Malaysian life insurance industry to continue to grow at a moderate rate.

In a separate statement, Affin clarified a local news story that said it had already sold a 16-storey building in Shah Alam.

It said the sale and purchase agreement in relation to the proposed transaction is currently being prepared and has yet to be executed.