Affin earnings climb 8% on higher turnover

KUALA LUMPUR: Affin Holdings Bhd’s earnings in the second quarter ended June 30 was 8% higher at RM148.4mil compared with the same quarter last year, on the back of turnover that rose 23.4% to RM588.29mil.

Earnings per share (EPS) for the quarter was 7.64 sen, bringing EPS in the first half of 2017 to 13.82 sen.

The financial group told Bursa Malaysia that its net profit rose to RM268.58mil in the first six months of 2017 from RM252.96mil in the same period last year.

Revenue in the first six months of the year was 21% higher to RM1.09bil.

“The group recorded its strong performance on the back of higher other operating income, Islamic banking income and net interest income amounting to RM194.3mil,” it said in a press release.

It is targeting a loan growth of 8% to 10% for 2017 with its Islamic division expected to grow by 15%.

This is in line with the group’s Priority Islamic Policy to grow its total Islamic financing portfolio by 40% in year 2019, and its Affinity transformation programmes.

ABB Group, Affin’s commercial banking unit, was the key contributor to the group’s overall performance with a 1.6% year-on-year improvement in profit before tax to RM271.8mil in the first half of 2017. Islamic banking income via ABB Group subsidiary Affin Islamic Bank Bhd recorded a profit before tax of RM55.7mil for the period, compared to RM68.54mil previously. Affin Hwang IB Group’s profit before tax after zakat was RM86.8mil, 57% higher than in the previous year. Net income grew 48% to RM368.8mil owing to a 50% growth in fee income from improved market sentiments and more lucrative management and service charges.

Affin Hwang IB’s subsidiary, Affin Hwang Asset Management Bhd, saw a 45% year-on-year increase in profit before tax at RM38.6mil. In the insurance segment, Axa Affin Life Insurance Bhd (AALI) incurred a pre-tax loss of RM9.8mil, improved from a pre- tax loss of RM16.4mil a year ago. Axa Affin General Insurance Bhd (AAGI) posted a lower profit before tax of RM68mil compared to RM92.9mil last year owing to an increase in expenses from transformation initiatives.

AAGI’s previous year’s results included a write-back on impairment of premium receivable of RM13.4mil.

“The bank’s strategic objectives will be focusing 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,” it said. With regard to its insurance segment, AALI is looking to cater to the mass affluent segment through various multi-distribution platforms, channels and products. AGI will face industry challenges such as the phased liberalisation of motor and fire insurance tariffs by consolidating its operations via selective growth, as well as investment in efficiency and transformation projects to enhance profitability.