Malaysian bank Affin Islamic second quarter profit down on lower net financing income, higher overheads

Malaysian bank Affin Islamic took a 32.08 per cent hit to its profit for the second quarter of this year.

The bank posted 36.2 million ringgit ($8.61 million) in profit before tax for the three months ending June 30 compared to 53.3 million ringgit for the preceding year’s corresponding quarter, it reported in a bourse filing on Tuesday.

Its profit for the six months ending June 30 was also hit, decreasing 20.33 per cent to 68.2 million ringgit compared to 85.6 million ringgit for the same period in 2018.

Affin attributed the fall to lower net finance income and higher overhead expenses, net of higher gain on financial instruments and lower allowance for credit impairment losses.

The Shariah-compliant subsidiary of Affin Bank Group posted assets of 27.3 billion ringgit at June 30, up 7.7 per cent from the end of 2018.

Overall, the Group posted net profit of 306.8 million ringgit for the first six months of 2019, up 36.4 per cent from the same period last year.

Its total assets increased by 0.4 per cent to 76.3 billion ringgit as at June 30 from December 31.

OUTLOOK

The Group said it is upgrading its digital capabilities, with a new e-wallet launched in July, and new retail internet and mobile internet banking in the pipeline.

It added that it is working with fintech partners on a new SME initiative.

It said “caution will prevail” in the banking industry due to the “soft economic outlook globally” and “selective asset growth” will be the focus for banks.

“In 2H2019, the banking industry is expected to be characterised by moderate loan growth and soft capital markets.”

($1 = 4.2045 Malaysian ringgit)

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