KUALA LUMPUR: Affin Bank Bhd's net profit for the second quarter ended June 30, 2024 (Q2 2024) rose 4.7 per cent to RM118.58 million versus RM113.23 million in Q2 2023, supported by higher loans and financing.
Its quarterly revenue, however, dropped to RM494.77 million from RM504.86 million in the same period last year due to net interest margin (NIM) compression.
For the first half of 2024 (1H24), Affin Bank's net profit dropped to RM228.79 million versus RM262.21 million a year ago. Revenue was marginally higher at RM999.31 million compared to RM999.15 million in 1H23.
Its net interest income (NII) stood at RM386.0 million, down RM50.2 million or 11.5 per cent from the previous financial period of RM436.2 million.
Its total assets expanded 7.2 per cent to RM108.2 billion, up from RM100.9 billion in the previous corresponding period, driven by a 10.5 per cent increase in loan and financing portfolios, reaching RM69.0 billion.
In 1H24, the bank's total loans, advances and financing grew to RM69 billion, contributed mainly by the 13.6 per cent growth in the community banking segment.
Housing loans grew 13.4 per cent while auto finance loans rose 9.2 per cent.
On the deposits, Affin Bank sziad its current account savings account (CASA) stood at RM18.4 billion for the period while CASA was 25.89 per cent.
Gross impaired loans ratio for the stood at 1.89 per cent t as compared to 1.78 per cent in 1H23.
Its operating expenses increased to RM746.7 million in 1H24 compared to RM646.4 million in the previous year.
Affin Bank president and group chief executive officer Datuk Wan Razly Abdullah said the group expects its NIM to normalise by 1H25, staying the course of its AX28 Strategic Plan, with the expectation that the US Federal Reserve rate will be cut by 50 –75 basis points in the immediate future and improving economic conditions in Malaysia.
"The group aims to optimise our operational cost structure and cost of funds while delivering innovative customer solutions to meet evolving expectations.
"NIM is expected to compress in the short-term as we focus on higher credit quality clients given the soft economic conditions," he added.
He added that the bank's Digital Core is ready, pending regulatory approval for Go-Live.
"In the meantime, we are proceeding with Phase 2 of our Digital Core developments, which include enhancements to CASA, deposits and e-Wallet capabilities.
"Additionally, the new mobile banking platform is progressing well, with a target Go-Live in December 2024, which is expected to further strengthen the group's deposit franchise," he added.