Highlight Affin posts lower 3Q net profit, 2.99 sen dividend

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Affin posts lower 3Q net profit, 2.99 sen dividend

By Sangeetha Amarthalingam / theedgemarkets.com   | November 27, 2015 : 8:45 PM MYT


KUALA LUMPUR (Nov 27): Affin Holdings Bhd ([You must be registered and logged in to see this image.] Valuation: 2.25, Fundamental: 1.10) posted a lower net profit of RM102.39 million or 5.27 sen per share for the third quarter ended Sept 30, 2015 (3QFY15) compared with RM133.95 million or 6.95 sen per share a year ago, as a result of higher allowance for loan impairment and lower operating income.

Net income for 3QFY15 was also lower by 7.8% at RM459.79 million from RM498.71 million in 3QFY14.

Nevertheless, the group declared an interim dividend of 2.99 sen per share for the financial year ending Dec 31, 2015 (FY15), payable on Dec 30.

For the cumulative nine-month period (9MFY15), net profit fell to RM271.86 million or 13.99 sen per share from RM384.07 million or 23.41 sen per share, mainly due to higher allowance for loan impairment and higher overhead expenses of RM132.4 million and RM56.1 million respectively.

The 29.2% drop in net profit was offset by the write-back of allowance for securities impairment of RM23.6 million and a reduction in finance cost of RM20.1 million.

Net income slipped by a marginal 0.08% to RM1.338 billion in 9MFY15 from RM1.339 billion in 9MFY14.

In a statement today, Affin said it reported an annualised loan growth rate of 4.3% for 9MFY15, predominantly in the segments of revolving credit, hire purchase, and housing loans/financing.

As at Sept 30, 2015, the group's loan to deposit ratio from customers was maintained at 91.4%, while the ratio of consumer deposits to total deposits stood at 29.7%.

The group's gross impaired loan ratio also stood at 2.21%, an increase of 17 basis points compared with June 30, 2015.

As a result of uncertainties of the current economic climate, Affin said overall loan growth for the banking industry is expected to moderate further in the second half of 2015, with domestic loan growth projected to be within the 8% to 8.5% bracket by the end of 2015.

The group said it will continue focusing on transactional banking to enhance brand value and visibility in the domestic market; while on a regional level, Affin is exploring the potential of establishing a presence in Asean.

"The group is optimistic [about] the prospects of its investment banking business. Affin Hwang Investment Bank Bhd ([You must be registered and logged in to see this image.] Valuation: N/A, Fundamental: N/A) (Affin Hwang IB) had just signed a joint distribution and marketing agreement with Thanachart Securities Plc, a leading securities services provider in Thailand, to distribute selected Thai research reports on a co-branded basis to institutional clients," it said.

"Affin has also secured an extension of time to complete its negotiation with Daiwa Securities Group in relation to the proposed minority stake by Daiwa in Affin Hwang IB, and it hopes to conclude the negotiation within the stipulated period," it added.

Affin shares closed up two sen or 0.83% at RM2.42 today, for a market capitalisation of RM4.66 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)