The banking group will continue to invest in digitalisation to build a stronger and sustainable business for the long term

by HARIZAH KAMEL

AFFIN Bank Bhd’s net profit for the second-quarter (2Q) surged 75% year-onyear (YoY) to RM117.95 million on higher interest income and profit from its Islamic banking operations.

Earnings per share for the second quarter ended June 30, 2021 (2Q21), amounted to 5.62 sen while revenue rose 25.18% YoY to RM578.9 million.

The group recorded a higher profit before tax after zakat of RM282.2 million for the six months of 2021 (1H21), attributed largely to 26.4% higher net interest income and 7.8% higher income from Islamic banking business.

In its exchange filing yesterday, the banking group stated it will continue to invest in digitalisation to build a stronger and sustainable business for the long term.

Net interest income (NII) increased by 26.4% to RM418.1 million attributed to lower interest expense as the group continues to focus on CASA (current account savings account) which has recorded a growth of 24.1% YoY.

Income from Islamic banking business improved by 7.8% YoY in the 1H21 to RM255.6 million due to higher net profit income and lower operating expenses, offset by a higher allowance for impairment losses.

Non-interest income of the group was RM442.8 million, a contraction of 26.1% from the RM599.2 million registered in the previous corresponding period, mainly due to lower gains from treasury business.

Its operating expenses increased by 3.4% to RM681 million due to higher personal costs but were partially cushioned by lower other expenses.

In the 1H21, the group’s total loans, advances and financing grew by 7.1% YoY to RM48.2 billion, contributed mainly from a 23.4% growth in the enterprise banking segment and 11.7% growth in the community banking segment.

CASA grew 24.1% YoY to RM11.9 billion resulting in significant improvement in CASA ratio from 19.9% in 2Q20 to 22.1% in 2Q21 while the group’s customer deposits increased by 11.4% YoY to RM53.8 billion as its CASA initiatives continued to deliver positive results.

The group’s liquidity coverage ratio stood at 160.9% and net stable funding ratio (NSFR) was 113%.

On asset quality in 1H21, the gross impaired loan ratio for the group was 3.27% against 3.06% in 1H20.

Affin Islamic Bank Bhd (AiBB) recorded a significant improvement in gross impaired financing of 1.55% in the 1H of this year.

The group’s loan loss coverage improved to 57.5%, however, AiBB has seen the biggest improvement in financing loss coverage at 74.3%.

President and group CEO Datuk Wan Razly Abdullah Wan Ali said apart from its New Repayment Assistance (NRA) 2.0 programme, the group will continue to engage with customers that have been affected by the pandemic through its Repayment Assistance Programme, which has recently been extended until year-end.

“We are continuing with more and more NRA applications with the prolonged MCO and are doing our best to support our customers who have been impacted by the slowdown.

“In addition, Affin Bank is ramping up its journey to create and expand digital offerings for individuals and business customers alike,” he said.

The bank has launched SME Colony mobile app version 3.0 to its small and medium size enterprise customers with enhanced functionality and user-friendliness and will continue to build a sustainable journey through the implementation of the AIM22 Programme.