Latest news with #RM124.1
Borneo Post
21-05-2025
- Business
- Borneo Post
Affin yet to see major contribution from Sarawak govt despite strong CASA growth
While Affin's Sarawak presence continues to strengthen through increased non-state-backed deposits, synergies from its strategic push into the state have yet to be fully realised. KUCHING (May 21): Affin Bank has yet to see meaningful contribution from the Sarawak government in its loans and deposits despite healthy current account savings account (CASA) growth and steady earnings, says analysts with Kenanga Research. The research house noted that while Affin's Sarawak presence continues to strengthen through increased non-state-backed deposits, synergies from its strategic push into the state have yet to be fully realised. 'We gathered that the Sarawak state government is still not a significant component in AFFIN's loans and deposit books, suggesting that synergies have yet to be reflected,' it said in a note on Tuesday. To recap, the bank has posted first-quarter financial year 2025 (1QFY25) net profit of RM124.1 million supported by stronger net income, which was in line with expectations and accounting for 20 per cent of Kenanga's full-year forecast and 22 per cent of the consensus forecast. Analysts highlighted that Affin has already surpassed its full-year CASA target of 31 per cent, with deposits in Sarawak helping to offset a decline in working capital loans. These now make up 16 per cent of the group's loan portfolio, amid uncertainties in global trade. 'This comes even before AFFIN implements payroll services to accommodate up to 30,000 civil servants in the state,' it added. Similarly, TA Securities viewed the group's CASA performance positively with its growth driven by strong corporate flows. 'This could improve further with the potential addition of Sarawak's payroll mandate,' it said. Kenanga Research added that a stronger relationship with the Sarawak government could serve as a key catalyst for the bank moving forward. 'Near-term catalysts could emerge from the Sarawak State Government's eventual large CASA deposits injection into Affin. 'From our own model estimates, every RM1 billion in new CASA deposits could lower cost of funds by 3 basis points and generate a return on equity (ROE) improvement of 10 basis points,' the research house added. Affin Bank Kenanga Research
New Straits Times
20-05-2025
- Business
- New Straits Times
Affin Bank eyes growth boost from Sarawak government's deposit injection
KUALA LUMPUR: Affin Bank Bhd could see positive catalysts arising from the Sarawak State Government's initial injection of substantial current and savings account (CASA) deposits into the bank. Kenanga Research, based on its internal model, estimated that every RM1 billion increase in CASA deposits could reduce the cost of funds by 3 basis points (bps) and boost return on equity (ROE) by 10 bps. Affin Bank Bhd reported a 12.6 per cent rise in net profit for the first quarter of 2025 (1Q25) to RM124.1 million, supported by stronger net income. Kenanga noted that the bank's quarterly performance accounted for 20 per cent of its full-year projection and 22 per cent of the consensus forecast. "The group's net interest margin (NIM) outlook is expected to be brighter, with it already beating its financial year 2025 (FY25) CASA target of 31 per cent, thanks to more non-state-backed deposits in Sarawak. "This comes even before Affin Bank implements payroll services to accommodate up to 30,000 civil servants there," it added. The firm said that following its model revisions, it has adjusted its earnings forecasts for Affin Bank for FY25 and financial year 2026 (FY26) lower by 2 per cent and 1 per cent, respectively. Meanwhile, Hong Leong Investment Bank (HLIB) said it has factored in the enlarged share base resulting from the recent bonus issue. Despite this, it is maintaining its target price of RM3.00 and reaffirming its 'Buy' recommendation on Affin Bank. HLIB explained that this is mainly due to a revision in its beta assumption from 1.0 to 0.9, indicating its belief that the bank now carries a lower risk profile. "We believe the premium is fair given the emergence of the Sarawak Government as Affin Bank's largest shareholder, presenting it with better prospects to leverage the state's growth ambitions. "That said, we believe Affin's risk-reward profile remains tilted to the upside, with significant growth prospects that are yet to fully materialise. Further upside largely hinges on tangible benefits emerging from the Sarawak government's strategic involvement," it added.
New Straits Times
19-05-2025
- Business
- New Straits Times
Affin posts 12.6pct higher profit to RM124.1mil in Q1
KUALA LUMPUR: Affin Bank Bhd's net profit rose 12.6 per cent to RM124.1 million in the first quarter ended March 31, 2025 (1Q25) from RM110.2 million a year ago. In a statement today, the bank said the improved performance was primarily driven by a higher net income of RM39.4 million. Affin's revenue for the quarter increased to RM543.93 million from RM504.54 million in 1Q24. As a result, the bank registered a higher earnings per share of 5.17 sen against 4.70 sen previously. Meanwhile, Affin Bank's gross loans and financing marked a year-on-year growth of 7.1 per cent, achieving a value of RM72.9 billion compared to RM68.0 billion as of March 31, 2024. Customer deposits increased 5.2 per cent to RM75.5 billion, while current account and savings account (CASA) ratio continued to improve significantly to 32.2 per cent per cent as of March 31, 2025, compared to 24.9 per cent in the same period last year. The bank's interest income (NII) recorded RM206.0 million, an increase of RM12.3 million or 6.4 per cent compared to the preceding financial quarter of RM193.7 million. Furthermore, Affin Islamic Bank Bhd recorded a pre-tax profit of RM87.1 million for the financial period ended March 31, 2025, a decrease of RM11.5 million as compared to RM98.6 million in the previous corresponding period. The result was mainly attributable to a higher operating expense and a higher allowance for impairment losses of RM13.0 million and RM28.6 million respectively. Affin Group president and group chief executive officer Datuk Wan Razly Abdullah said the bank's first quarter performance reflects continued execution of its Affin Axelerate 2028 (AX28) Plan, with pre-tax profit rising 23.7 per cent year-on-year to RM178.2 million. He added that this was underpinned by higher net interest income, improved funding mix, and a stronger contribution from associates. "Amid a persistently tight monetary environment and ongoing global macroeconomic headwinds, we continued to exercise prudent cost and credit discipline. "While we remain cautious on the near-term outlook due to external volatility, we remain confident in our ability to navigate the landscape, supported by healthy asset quality, a well-diversified balance sheet and disciplined execution," he noted. Wan Razly also said Affin's recent attainment of its first international credit rating of A3 from Moody's Ratings strengthens the group's credit profile and elevates its standing in global capital markets. This positions the bank to secure more cost-efficient US dollar funding, diversify its investor base and unlock strategic cross-border financing opportunities that support its long-term growth trajectory. Meanwhile, Wan Razly noted that AffinAlwaysX, the bank's new mobile banking application, was launched internally to 5,700 employees and is performing well ahead of its public rollout on May 22. "Designed with enhanced UI/UX features, excellent security, and exciting upgrades, AffinAlwaysX is expected to drive exponential growth towards a target of 1.3 million users by year-end. "This initiative will also strengthen CASA stickiness, supported by a focused payroll acquisition strategy. "Our CASA ratio stood at 32 per cent as at 1Q25, surpassing the FY25 target of 31 per cent, is a result of our continued efforts to lower the group's cost of funds. "We expect the momentum in CASA growth to snowball into lower cost of funds and net interest margin expansion," he added. Wan Razly said Affin's strong business pipeline includes financial advisory services and debt capital market deals, with the recent lead role in the financing of Macrovalue's acquisition of Cold Storage Singapore, with many more landmark deals to come. "Our recent collaboration with MUFG Bank (Malaysia) Bhd, the fifth largest bank in Asia, underscores our commitment to providing tailored solutions, facilitating cross-border trade and investment, and expanding our expertise in key areas, including Islamic finance, green finance, and digital transformation. "By leveraging our deep market knowledge and MUFG's global network, we are unlocking new opportunities for our customers and business partners, helping them scale in an increasingly interconnected global economy," he said.
