KUALA LUMPUR, Aug 25 — Affin Bank Bhd’s net profit declined 56.8 per cent to RM67.40 million for the second quarter ended June 30, 2020 from RM156.03 million in the same period last year, on the back of 3.02 per cent higher revenue of RM512.96 million from RM497.93 million.
For the first half of this year, the bank’s net profit fell to RM190.97 million from RM293.26 million in 1H2019 while revenue grew to RM1.14 billion from RM970.44 million.
In a filing with Bursa Malaysia, the bank attributed the weaker performance to higher credit impairment losses of RM170.9 million due to Covid-19, higher overhead expenses of RM99.7 million and recognition of modification loss of RM79.7 million.
“The modification loss was incurred arising from the waiving of interest charges during the six-month loan and financing moratorium for hire purchase and personal financing,” it said.
It said the group’s operating expenses increased by RM99.7 million or 16.2 per cent, driven by a rise in personnel costs linked to trading performance. Nevertheless, the cost to income ratio improved to 58.5 per cent in 1H2020 from 63.4 per cent in 1H2019.
On net interest income, Affin Bank said it reduced by RM44.7 million or 11.9 per cent in line with the reduction in gross loans, advances and financing by RM2.6 billion and financial Investments at fair value through other comprehensive income (FVOCI) by RM2.0 billion, as well as the overnight policy rate (OPR) cuts during the period under review.
In 1H2020, the group’s total gross loans, advances and financing shrunk by two per cent to RM45.0 billion, mainly due to rebalancing of portfolios.
Moving forward, president and group chief executive officer Wan Razly Abdullah Wan Ali said the bank is committed to support all its customers in weathering through this challenging time with financial relief programmes provided by the government through Penjana schemes for Covid-19.
“The bank remains the highest capitalised bank in Malaysia with total capital ratio of 23.5 per cent and the group has launched its own Financial Assistance and Instalment Relief Programme (FAIR) for its customers.
“FAIR is a specially customised and supportive financial assistance for customers of the bank to ensure customers’ business sustainability and financial well-being,” he added. — Bernama
