KUALA LUMPUR: Affin Bank Bhd, which reported net interest margin compression in 1Q24 had impacted its bottomline, will remain focused on expanding its current account savings account (Casa) franchise and high-margin businesses while optimising costs.
The bank said net profit in the first quarter ended March 31, 2024, came to RM110.21mil, down from RM148.98mil in the same quarter in 2023.
Earnings per share contacted to 4.7 sen from 6.55 sen previously.
Revenue, however, had risen to RM504.54mil from RM494.29mil in the comparative period.
President and group CEO Datuk Wan Razly Abdullah said the prolonged competitive pressures on deposit pricing remain a challenge.
However, he said the bank’s new mobile banking app had garnered over RM400mil in Casa deposits since its launch in October 2023.
The bank’s high-margin businesses have also shown growth, particularly in the personal financing segment, which grew 27.1% year-on-year (y-o-y) to RM6.1bil, he added.
Meanwhile, the credit card segment grew 23.4% y-o-y to RM461.5mil.
Moving forward, Wan Razly said the bank remains cautious on the fragile economic environment due to geopolitical uncertainties in Europe and the Middle East, coupled with weak trade demand from the US and Europe.
“Given the global economic weakness, we have raised our underwriting standards in anticipation of potential knock-on effects on the Malaysian economy.
“Our capital position and loan loss reserves provisions remain elevated to protect the bank and its shareholders.”
He added that the bank is awaiting developments on the shareholding changes between Lembaga Tabung Angkatan Tentera (LTAT) and Boustead Holdings Bhd with the state government of Sarawak.
During the quarter, Affin Bank’s net interest income (NII) was RM193.7mil, a 9.2% increase quarter-on-quarter (q-o-q) compared to the previous financial quarter.
Non-interest income dropped 9.5% q-o-q to RM142.5mil.
Operating expenses decreased slightly to RM378.9mil from RM400.4mil in the preceding quarter, while cost-to-income ratio was 75.11%, an increase from 71.57% in the previous quarter.
Total loans, advances and financing in 1Q24 grew 11.2% y-o-y to RM68bil while Casa deposits stood at RM17.9bil with a Casa ratio of 24.88%.
Group customer deposits increased 8.9% y-o-y to RM71.8bil as at 1Q24.