AFFIN BANK PROFIT SLIPS TO RM230.32M

Results due to higher allowances for credit losses, operating expenses, modification loss

AFFIN Bank Bhd’s revenue rose more than 18 per cent last year but higher provisions dampened its profit. Group net profit dropped to RM230.32 million in the year ended Dec 31, 2020, from RM487.77 million in 2019.

Affin Bank said this was primarily due to higher allowances for credit losses, higher operating expenses and a one-off modification loss related to Covid-19 relief measures amounting to RM78.4 million.

Its revenue rose 18.3 per cent to RM2.26 billion from RM1.91 billion, attributed to higher non-interest income, income from Islamic banking and net interest income.

The group’s allowances for impairment losses increased to RM561.6 million, up from RM55.5 million in 2019, mainly due to additional provisions and management overlay.

For the fourth quarter, Affin Bank posted a net loss of RM9.36 million against a net profit of RM122.11 million, while revenue surged 28.6 per cent to RM620.8 million from RM482.66 million previously.

President and group chief executive officer Datuk Wan Razly Abdullah Wan Ali said 2020 had been a tough year for Affin Bank due to asset quality issues arising from the economic slowdown.

“However, we have intensified efforts to help our customers during this difficult period through the (loan) moratorium and different financial relief packages with the government’s support.

“We are optimistic that the government’s rollout of the vaccine programme will accelerate economic recovery in the coming months,” he said in a separate statement.

Affin Bank also declared a dividend of 3.5 sen per share for financial year 2020.

The bank’s net interest income increased 3.9 per cent to RM772.1 million, driven by improved net interest margin from falling cost of funds following an increase in current account savings account composition and the repricing of deposits post-Overnight Policy Rate cuts.

The bank’s non-interest income in financial year 2020 jumped 43.3 per cent to RM1.09 billion due to higher net gain on sales of financial instruments and fees and commission income of RM217.5 million and RM108.3 million, respectively.

Its cost to income ratio improved to below 60 per cent.