AEON Credit’s FY22 missed expectations
KUCHING: AEON Credit Service M Bhd’s (AEON Credit) net earnings for its financial year 2022 (FY22) of RM365.4 million came below consensus estimates, only making up 86 per cent respective estimates.
The negative deviation is due to significantly wider booking of impairment losses in its last quarter of FY22 of RM154.7 million as the repayment trend of the group’s portfolio appears to be adversely affected by the lapse of assistance programs.
“Year on year (y-o-y), FY22 saw a flattish decline of net interest income as both gross financing receivables and net interest margins trended similarly,” commented analysts with Kenanga Investment Bank Bhd (Kenanga Research).
“This was lifted by non-fee based income, tipping total income for the year slightly by two per cent.”
CIR inched up to 39.6 per cent on higher personnel expenses but thanks to 40 per cent improvement in impairments and provisions recorded, net earnings surged to RM365.4 million.
On a quarterly basis, 4QFY22 reported a five per cent decline in income as NIM eased by 77 basis points amidst growth in financing accounts as demand was fuelled by higher economic spending.
However, 4QFY22 was marred by write-offs and provisions amounting to RM154.7 million.
“In spite on the higher loans base, repayment trends of existing accounts appears to be troubled no thanks to the lapse of assistance programs, which we reckon could be customers opting to repay bank loans over other financing channels.
“This led 4QFY22 net profit to come in at RM23.4 million. Financing industry still has room. We anticipate financiers to be overall beneficiary of the ongoing economic recovery as consumer spending resumes, demonstrated by the group’s recent quarter’s expansion.”