KUALA LUMPUR: Affin Group says the prolonged competitive pressures on deposit pricing remain a challenge.
However, the group remains focused on expanding its current account savings account (Casa) franchise and high-margin businesses, Affin president and group chief executive officer Datuk Wan Razly Abdullah said.
A the same time, the group will contimue optimising costs, which are encapsulated in its Affin Axelerate 2028 (AX28) plan," Wan Razly said in a statement on its latest interim results today.
Moving forward, Wan Razly said Affin 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, he said the group has raised its 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.
The group recorded a pre-tax profit after zakat of RM144.0 million for the first quarter (Q1) ended March 31, 2024, an increase of 110.2 per cent compared to RM68.5 million in the preceding quarter.
However, on a year-on-year (YoY) basis, the pre-tax profit dropped 26.6 per cent due to net interest margin compression.
Affin's net profit fell 26 per cent to RM110.21 million in Q1 2024 compared to RM148.98 million in the same quarter in 2023.
For the same period under review, the group's net interest income fell 6.6 per cent to RM361.98 million, while non-interest income surged 34 per cent to RM142.56 million.
The group's total assets grew by 14.1 per cent to RM107.3 billion in Q1 2024, up from RM94.1 billion in the previous corresponding period.
During Q1 2024, Affin's total loans, advances and financing grew 11.2 per cent to RM68 billion, contributed mainly by a 15 per cent growth in the community banking segment.
Its housing loans edged up 15.2 per cent, while auto finance loans rose by 10.3 per cent.
Affin's Casa deposits were recorded at RM17.9 billion in Q1 2024, as customer deposits increased by 8.9 per cent to RM71.8 billion.
In terms of asset quality, gross impaired loans (debts deemed irrevocable as a percentage of total loans) stood at 1.96 per cent, a tad above the 1.90 per cent targeted for the full FY2024.
Loan loss coverage, however, declined to 102.33 per cent from 116.86 per cent.
